Conversion. The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Preferred Stock Purchase Agreement (Capital Z Financial Services Fund Ii Lp), Preferred Stock Purchase Agreement (Capital Z Financial Services Fund Ii Lp), Preferred Stock Purchase Agreement (Capital Z Financial Services Fund Ii Lp)

Conversion. ~~The holders of the Series B~~ Class A OP Preferred ~~Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock~~ Units shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the ~~Transfer Agent~~ General Partner as holder thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (ia) ~~In case the Corporation~~ Upon conversion of any number of Series A Preferred Shares into Common Shares, an equal number of Class A OP Preferred Units shall ~~at any time or~~ automatically be converted into OP Common Units. The conversion ratio in effect from time to time ~~after~~ for the ~~Issue Date (A) pay a dividend or make a distribution, on the outstanding shares~~ conversion of Class A OP Preferred Units into OP Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, thenUnits pursuant to this Section 7 shall at all times be equal to, and ~~in each such case~~shall be automatically adjusted as necessary to reflect, the conversion ratio in effect ~~immediately prior~~ from time to time for the conversion of Series A Preferred Shares into Common Shares. (b) The General Partner, as holder of Class A OP Preferred Units shall be entitled, with respect to such ~~event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B~~ Class A OP Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combinationUnits held, at the close of business on ~~the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue~~ a Record Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than to receive the ~~Current Market Price (for a period of 15 consecutive trading days prior to~~ distribution payable on such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio units on the ~~day immediately prior to such date by~~ corresponding Distribution Payment Date (B) the period with respect which a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be distribution is made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and a Distribution Payment Date called the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (iiquarter"), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for if Class A OP Preferred Units are converted during the period between the close of ~~20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off~~ business on any Record Date and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the ~~next Business Day following~~ corresponding Distribution Payment Date then the ~~date on which any~~ General Partner as such ~~dividend or distribution is made~~ holder, in addition to all accrued and unpaid distributions with respect to prior quarters, shall be ~~effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders~~ entitled to receive a pro rata portion of the distribution which would have been payable on such ~~dividend or distribution~~converted Class A OP Preferred Units had such Units been outstanding for the entire quarter determined by multiplying the amount of the distribution which would have been payable on such converted Class A OP Preferred Unit had such Units been outstanding for the entire such quarter by a fraction the numerator of which is the number of days in the current quarter elapsed through the day immediately preceding the date of conversion of such converted Class A OP Preferred Units and the denominator of which is the total number of days in the current quarter; provided, ~~however~~further, if that the General Partner as such converting holder will be required to pay to the Partnership (and the Partnership shall be entitled to deduct from the pro rata distribution which the General Partner as such holder is entitled to receive with respect to the converted Class A OP Preferred Units for such quarter) at the time of such conversion a pro rata portion of the distribution which the General Partner as such converting holder is expected to receive on the OP Common Units into which his Class A OP Preferred Units were converted for such quarter determined by multiplying the amount of the distribution which would have been payable on such OP Common Units for the immediately preceding quarter by a fraction the numerator of which is the number of days in the current quarter elapsed through the day immediately preceding the date of conversion of such converted Class A OP Preferred Units and the denominator of which is the total number of days in the current quarter. In the event that the distribution on the OP Common Units for the quarter in which the Class A OP Preferred Units are converted to OP Common Units is less than the distribution on the OP Common Units for the immediately preceding quarter, the Partnership will pay the General Partner as such holder an amount equal to the difference between (i) the pro rata portion of the distribution on the OP Common Units which the General Partner as holder was expected to receive and which was deducted by the Partnership pursuant to the last proviso to of the preceding sentence ~~applies, then such adjustment shall be made~~ and ~~be effective as~~ (ii) the pro rata portion of ~~such 35th Trading Day after~~ the ~~effective date of such Spin-Off~~distribution on the OP Common Units which the holder actually received. (ivc) ~~For purposes~~ No fractional OP Common Units shall be issued upon conversion of ~~this paragraph G~~Class A OP Preferred Units. Instead of any fractional OP Common Units that would otherwise be deliverable upon the conversion of Class A OP Preferred Units, the Partnership shall pay to the General Partner as holder of such converted units an amount in cash equal to the cash payable to a holder of an equivalent number of ~~shares~~ converted Series A Preferred Shares in lieu of fractional Common Shares. (d) The Partnership will pay any and all documentary stamp, issue or transfer taxes, and any other similar taxes, payable in respect of (i) the issue or delivery of OP Common Units or other securities or property on conversion or redemption of Class A OP Preferred Units pursuant hereto, and (ii) the issue or delivery of Common ~~Stock at any time outstanding shall not include any shares~~ Shares or other securities or property on conversion or redemption of ~~Common Stock then owned or held by or for~~ Series A Preferred Shares pursuant to the ~~account~~ terms of the ~~Corporation~~General Partner's Declaration of Trust, as the same may be amended, restated or supplemented from time to time.

Appears in 3 contracts

Sources: Agreement of Limited Partnership (Kramont Realty Trust), Merger Agreement (Cv Reit Inc), Merger Agreement (Kranzco Realty Trust)

Conversion. The ~~holders of the Series B Preferred Stock~~ Holder or its assigns shall have ~~conversion rights as follows: A. Each share~~ the right, from time to time, commencing on the Issuance Date of ~~Series B Preferred Stock shall be convertible at the direction of~~this Note, ~~and by notice~~ to ~~the Corporation from, the holders of a majority~~ convert any part of the outstanding ~~shares~~ interest or Principal Amount of ~~Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series,~~ this Note into ~~one thousand (1,000)~~ fully paid and ~~nonassessable~~ non-assessable shares of Common Stock ~~subject~~ of the Maker (xthe “Conversion Stock”) ~~to adjustment from time to time~~ at the Conversion Price determined as provided ~~below~~ herein. Promptly after delivery to Maker of a Notice of Conversion of Convertible Note in the form attached hereto as Exhibit 1, properly completed and duly executed by the Holder or its assigns (~~as so adjusted~~a “Conversion Notice”), the ~~"conversion ratio")~~ Maker shall issue and ~~(y) (prior~~ deliver to or upon the ~~consummation~~ order of the ~~Recapitalization) to limitations resulting from the available~~ Holder that number of shares of Common Stock ~~which may~~ for the that portion of this Note to be ~~reserved for issuance upon such~~ converted as shall be determined in accordance herewith. No fraction of a share or scrip representing a fraction of a share will be issued on conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for but the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded ~~down~~ to the nearest whole share~~, and the holder~~ . The date on which Notice of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice Conversion is given (the ~~time of mailing of such notice~~ “Conversion Date”) shall be deemed to be the ~~time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the~~ date on which the Holder faxes or emails the Notice of Conversion duly executed to the Maker. Certificates representing Common Stock upon conversion will be delivered to the Holder within two (i2) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify trading days from the date as the Notice of ~~which~~ Conversion is delivered to the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may beMaker. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number Delivery of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for upon conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior made to the ~~happening of such event~~ address specified by the Holder or ~~the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x)~~ its assigns in the ~~case~~ Notice of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effectiveConversion. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Minivest Agreement (KYN Capital Group, Inc.), Securities Purchase Agreement (ABCO Energy, Inc.), Securities Purchase Agreement (Image Protect, Inc.)

Conversion. The holders of the Series B C Preferred Stock shall have conversion rights as follows: A. Each share of Series B C Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, (i) the holder thereof or (ii) the holders of a majority of the outstanding shares of Series B C Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, ~~provided ,~~provided, that any conversion pursuant to ~~this paragraph A~~ clause (ii) above of less than all of the outstanding shares of Series B C Preferred Stock shall be on a pro rata basis amongst all holders of Series B C Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If ~~the holders of~~ a ~~majority of the outstanding shares~~ holder of Series B C Preferred Stock ~~give~~ gives notice (an "Optional Conversion Notice") of conversion under paragraph A above, ~~the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock~~ such holder shall surrender with such Optional Conversion Notice the duly endorsed certificate or certificates ~~therefor duly endorsed~~for the Series C Preferred Stock being converted, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. ~~The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to~~ If the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of ~~such shares~~ a majority of ~~Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of~~ the outstanding shares of Series B C Preferred Stock ~~shall be made without charge for any issue, stamp or other similar tax in respect~~ give notice of ~~such issuance. C. No fractional shares shall be issued upon~~ conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which under paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the RecapitalizationA above, the Corporation shall at notify all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the record holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock ~~and the Warrants) nor~~ (~~B) the issuance~~ a "Mandatory Conversion Notice"). Following receipt of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii)a Mandatory Conversion Notice, the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share holders of Series B C Preferred Stock shall ~~be entitled to receive, upon~~ surrender the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend certificate or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.certificates therefor duly

Appears in 3 contracts

Conversion. ~~The holders~~ (a) Any Series B Stockholder shall have the right, at any time or from time to time, to convert any or all of its shares of Series B Stock into that number of fully paid and nonassessable shares of Common Stock for each share of Series B Stock so converted equal to the quotient of the Series B ~~Preferred Stock shall have conversion rights~~ Original Purchase Price divided by the Series B Conversion Price (as ~~follows: A. Each~~ defined in Section 7(e) hereof) for such share of Series B ~~Preferred Stock~~ Stock, as last adjusted and then in effect; provided, however, that cash shall be ~~convertible at the direction of, and by notice to the Corporation from, the holders of a majority~~ paid in lieu of the ~~outstanding~~ issuance of fractional shares of Common Stock, as provided in Section 7(d) hereof. (i) Any Series B Stockholder who exercises the right to convert shares of Series B ~~Preferred Stock~~Stock into shares of Common Stock pursuant to this Section 7 shall be entitled to payment of all accrued dividends, ~~at any time~~whether or not declared and all declared but unpaid dividends payable with respect to such Series B Stock pursuant to Section 3 herein, up to and including the Conversion Date (as defined in Section 7(b)(iii) hereof). (ii) Any Series B Stockholder may exercise the right to convert such shares into Common Stock pursuant to this Section 7 by delivering to the Corporation during regular business hours, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the ~~Recapitalization) to limitations resulting from the available number of shares of Common Stock which~~ Corporation or at such other place as may be ~~reserved for issuance upon such conversion~~designated by the Corporation, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates ~~therefor~~ for the shares to be converted (the “Series B Certificate”), duly ~~endorsed, at the office of~~ endorsed or assigned in blank to the Corporation (if required by it) or an affidavit of ~~any transfer agent for~~ loss as to the same. (iii) Each Series B Certificate shall be accompanied by written notice stating that such ~~Series,~~ holder elects to convert such shares and ~~shall state therein~~ stating the name or names (with address) in which the certificate or certificates for the shares of Common Stock (the “Common Certificate”) are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been ~~made immediately prior to the close of business~~ effected on the date when such delivery is made, and such date is referred to herein as the “Conversion Date.” (iv) As promptly as practicable thereafter, the Corporation shall issue and deliver to or upon the written order of such holder, at the place designated by such holder, (A) a Common Certificate for the number of full shares of Common Stock to which such holder is entitled and (B) a check or cash in respect of any fractional interest in shares of Common Stock to which such holder is entitled, as provided in Section 7(d) hereof, payable with respect to the shares so converted up to and including the Conversion ~~Notice~~ Date. (v) The person in whose name the Common Certificate or Certificates are to be issued shall be deemed to have become a holder of record of Common Stock on the applicable Conversion Date, unless the transfer books of the Corporation are closed on such Conversion Date, in which event the holder shall be deemed to have become the stockholder of record on the next succeeding date on which the transfer books are open, provided that the Series B Conversion Price upon which the conversion shall be executed shall be that in effect on the Conversion Date. (vi) Upon conversion of only a portion of the number of shares represented by a Series B Certificate, the Corporation shall issue and deliver to or upon the ~~person~~ written order of the holder of such Series B Certificate, at the expense of the Corporation, a new certificate covering the number of shares of Series B Stock representing the unconverted portion of the shares of Series B Stock represented by the Series B Certificate, which new certificate shall entitle the holder thereof to all the rights, powers and privileges of a holder of such Series B Stock. (c) If a Series B Stockholder shall surrender more than one share of Series B Stock for conversion at any one time or ~~persons entitled~~ holds more than one share of Series B Stock that is automatically converted, including without limitation pursuant to ~~receive~~ a Special Mandatory Conversion, then the number of full shares of Common Stock issuable upon ~~such~~ conversion thereof shall be ~~treated for all purposes as~~ computed on the ~~recordholder or holders~~ basis of ~~such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion~~ the aggregate number of shares of Series B ~~Preferred~~ Stock ~~shall be made without charge for any issue, stamp~~ so surrendered or ~~other similar tax in respect of such issuance~~held. C. (d) No fractional shares of Common Stock shall be issued upon conversion of ~~any shares of~~ Series B ~~Preferred Stock and the number of shares of Common Stock to be issued~~ Stock. The Corporation shall ~~be rounded down~~ instead pay a cash adjustment for any such fractional interest in an amount equal to the ~~nearest whole share~~Current Market Price thereof on the Conversion Date, ~~and the holder of Series B Preferred Stock shall be paid~~ as determined in ~~cash for any fractional share~~accordance with Section 7(e)(viii) hereof. ~~D. In case at any time or from time to time~~ (e) For all purposes of this Certificate of Designations, the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders initial conversion price of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be ~~deemed given if sent by facsimile transmission~~$6.142, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as ~~follows:~~follows (the conversion price of the Series B Stock is referred to herein as the “Series B Conversion Price”): (i) ~~In case~~ Subject to Section 7(e)(ii) and 7(e)(x) below, if the Corporation ~~shall~~ shall, at any time or from time to time after the ~~Issue Date (A) pay a dividend~~ Series B Original Issuance Date, issue or ~~make a distribution, on the outstanding~~ sell any shares of Common Stock ~~in shares~~ (which term, for purposes of ~~Common Stock~~this Section 7(e)(i), ~~(B) subdivide the outstanding~~ including all subsections thereof, shall be deemed to include all other securities convertible into, or exchangeable or exercisable for, shares of Common Stock ~~into a larger number of shares of Common~~ (including, but not limited to, Preferred Stock)) or options to purchase or other rights to subscribe for such convertible or exchangeable securities, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each ~~such case~~case other than Excluded Stock (as defined in Section 7(e)(ii) below), for a consideration per share less than the ~~conversion ratio~~ Series B Conversion Price in effect immediately prior to the issuance of such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of (a “Dilutive Issuance”), then the ~~Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of~~ Series B ~~Preferred Stock been surrendered for conversion~~ Conversion Price in effect immediately prior to ~~the happening of~~ each such ~~event or the record date therefor, whichever is earlier. An adjustment made pursuant~~ Dilutive Issuance shall automatically be reduced to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price ~~per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than~~ equal to the ~~Current Market Price (for a period of 15 consecutive trading days prior to~~ product obtained by multiplying such ~~date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of~~ Series B ~~Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined~~ Conversion Price by ~~multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B)~~ a fraction, the numerator of which shall be the ~~sum~~ number of shares of Common Stock outstanding immediately prior to such issuance (1including, without limitation, shares of Common Stock issued or issuable upon conversion of the outstanding Series B Stock, but excluding shares of Common Stock issuable upon conversion of any dividends accrued on such Series B Stock) plus the number of shares of Common Stock ~~outstanding on~~ that the ~~date on which~~ aggregate consideration received by the Corporation for the additional stock so issued would purchase at such ~~shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert~~Series B Conversion Price as in effect immediately prior to such issuance, and the denominator of which shall be the ~~sum of (x) the~~ number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant immediately prior to ~~this clause (ii) shall be made on the next Business Day following the date on which any~~ such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock ~~which are referred to in clause (i~~issued or issuable upon conversion of the outstanding Series B Stock, but excluding shares of Common Stock issuable upon conversion of any dividends accrued on such Series B Stock) plus the number of shares of additional stock so issued. For purposes of this ~~paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof~~Section 7(e)(i), the number of shares of Common Stock deemed issuable upon conversion of such outstanding shares of Series B Stock shall be determined ~~by multiplying (1) the applicable conversion ratio on the day immediately prior~~ without giving effect to any adjustments to the ~~record date fixed for~~ Series B Conversion Price resulting from the ~~determination~~ Dilutive Issuance that is the subject of ~~stockholders entitled~~ this calculation. For the purposes of any adjustment of the Series B Conversion Price pursuant to ~~receive such dividend or distribution by (2) a fraction~~this Section 7(e)(i), the ~~numerator of which~~ following provisions shall be applicable. a. In the ~~then Current Market Price per share~~ case of the issuance of Common Stock in whole or in part for cash, the consideration shall be deemed to be the amount of cash paid therefor after deducting therefrom any discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof, plus the value of any property other than cash received by the Corporation, determined as provided in Section 7(e)(i)(b) hereof, plus the value of any other consideration received by the Corporation determined as set forth in Section 7(e)(i)(c) hereof. b. In the case of the issuance of Common Stock for a consideration in whole or in part in property other than cash, the ~~period~~ value of ~~20 Trading Days preceding~~ such ~~record date, and the denominator of which~~ property other than cash shall be deemed to be the fair market value of such ~~Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (~~property as determined in good faith by the Board of ~~Directors~~ Directors, irrespective of ~~the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution~~any accounting treatment; provided, however, that such fair market value of such property as determined by the Board of Directors shall not exceed the aggregate Current Market Price (as defined in Section 7(e)(viii) hereof) of the ~~event of a distribution of~~ shares of ~~capital stock of a Subsidiary~~ Common Stock or such other securities being issued, less any cash consideration paid for such shares, determined as provided in Section 7(e)(i)(a) hereof and less any other consideration received by the Corporation for such shares, determined as set forth in Section 7(e)(i)(c) hereof. c. In the case of the ~~Corporation~~ issuance of Common Stock for consideration in whole or in part other than cash or property, the value of such other consideration shall be deemed to be the aggregate par value of such Common Stock (~~a "Spin-Off") made~~ or the aggregate stated value if such Common Stock has no par value). d. In the case of the issuance of options or other rights to ~~holders~~ purchase or subscribe for Common Stock or the issuance of securities by their terms convertible into or exchangeable or exercisable for Common Stock or options to purchase or other rights to subscribe for such convertible or exchangeable or exercisable securities: i. the aggregate maximum number of shares of Common ~~Stock, the numerator~~ Stock deliverable upon exercise of such ~~fraction~~ options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the ~~sum~~ time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in Sections 7(e)(i)(a), (b) and (c) hereof), if any, received by the Corporation upon the issuance of such options or rights plus the ~~Current Market Price per share~~ minimum purchase price provided in such options or rights for the Common Stock covered thereby (the consideration in each case to be determined in the manner provided in Sections 7(e)(i)(a), (b) and (c) hereof); ii. the aggregate maximum number of shares of Common Stock deliverable upon conversion of, or in exchange for, any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the ~~period~~ time such securities were issued or such options or rights were issued and for a consideration equal to the consideration received by the Corporation for any such securities and related options or rights (excluding any cash received on account of ~~20 Trading Days preceding~~ accrued interest or accrued dividends), plus the ~~35th Trading Day after~~ minimum additional consideration, if any, to be received by the ~~effective date~~ Corporation upon the conversion or exchange of such ~~Spin-Off~~ securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in Sections 7(e)(i)(a), (b) and (c) hereof); iii. if there is any change (whether automatic pursuant to the ~~Current Market Price~~ terms contained therein or as a result of the amendment of such terms) in the exercise price of, or number of shares deliverable upon exercise of, any such options or rights or upon the conversion or exchange of any such convertible or exchangeable securities (or other than a change resulting from the ~~fraction~~ original antidilution provisions thereof in place at the time of ~~a share)~~ issuance of ~~capital stock of~~ such security), then the ~~Subsidiary which is distributed~~ Series B Conversion Price shall automatically be readjusted in proportion to such ~~Spin-Off in respect of one share of Common Stock for~~ change (notwithstanding the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An foregoing, no adjustment ~~made~~ pursuant to this clause shall have the effect of increasing the Series B Conversion Price to an amount which exceeds the lower of (~~iii~~i) the Series B Conversion Price on the original adjustment date, or (ii) the Series B Conversion Price that would have resulted from any Dilutive Issuances between the original adjustment date and such readjustment date); iv. upon the expiration of any such options or rights or the termination of any such rights to convert or exchange such convertible or exchangeable securities (or in the event that the change that precipitated an adjustment pursuant to Section 7(e)(i)(d)(iii) hereof is reversed or terminated, or expires), then the Series B Conversion Price shall be ~~made~~ automatically readjusted to the Series B Conversion Price that would have been obtained had such options, rights or convertible or exchangeable securities not been issued; and v. if the terms of any option or convertible security (excluding options or convertible securities which, upon exercise, conversion or exchange thereof, would entitle the ~~opening~~ holder thereof to receive shares of ~~business on~~ Common Stock which are Excluded Stock), the ~~next Business Day following the date on~~ issuance of which ~~any such dividend or distribution is made and shall be effective retroactively immediately~~ was not a Dilutive Issuance, are revised after the ~~close~~ Series B Original Issuance Date (either automatically pursuant the provisions contained therein or as a result of ~~business on the record date fixed~~ an amendment to such terms) to provide for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. either (iv1) ~~For purposes of this paragraph G,~~ any increase in the number of shares of Common Stock at issuable upon the exercise, conversion or exchange of any ~~time outstanding shall not include~~ such option or convertible security or (2) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such option or convertible security, as so amended, and the shares of Common Stock ~~then owned~~ subject thereto shall be deemed to have been issued effective upon such increase or ~~held by or for~~ decrease becoming effective. e. In the ~~account~~ case of the ~~Corporation~~issuance of shares of Common Stock on more than one date that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Series B Conversion Price pursuant to the terms of this Section 7(e), and such issuance dates occur within a period of no more than 90 days from the first such issuance to the final such issuance, then, upon the final such issuance, the Series B Conversion Price shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).

Appears in 3 contracts

Sources: Series B Convertible Preferred Stock and Warrant Purchase Agreement (Radius Health, Inc.), Series B Convertible Preferred Stock and Warrant Purchase Agreement (Radius Health, Inc.), Series B Convertible Preferred Stock and Warrant Purchase Agreement (Radius Health, Inc.)

Conversion. ~~The holders~~ (a) Each share of ~~the~~ Series B Preferred Stock ~~shall have conversion rights as follows: A. Each~~ may, at the election of the holder thereof, be converted into shares of Common Stock at any time after the effectiveness of a certificate of amendment to the Certificate of Incorporation duly with the Secretary of State if Delaware that increases the authorized number of shares of Common Stock (the “Trigger Date”), and each share of Series B Preferred Stock shall be ~~convertible at~~ automatically converted into shares of Common Stock on the ~~direction of, and by notice to the Corporation from, the holders of a majority~~ later of the ~~outstanding~~ Trigger Date or thirty (30) days after the conclusion of the second annual meeting of the stockholders of the Company following the date of this Certificate of Designation (such later date being referred to as the “Conversion Date”). Any conversion under this Section III (a) shall entitle the each holder (a “Holder") of the Series B Preferred Stock to receive 1,000 shares of Common Stock for each share of Series B Preferred ~~Stock, at any time, at the office of the Corporation or any transfer agent~~ Stock (subject to appropriate adjustment for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding fractional shares of Series B Preferred Stock ~~shall be on a pro rata basis amongst all holders~~ and in the event of any stock dividend, stock split, combination or other recapitalization). Upon the entire conversion of the Series B Preferred Stock~~. After consummation of the Recapitalization~~, the ~~number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of~~ Series B Preferred Stock ~~give notice of conversion under paragraph A above,~~ shall be returned to the ~~Corporation shall notify all other record holders of~~ Company for cancellation. (b) To elect to convert Series B Preferred Stock into Common Stock a holder shall be required to give written notice of such election to the Company and surrender to the Company the certificates for the Series B Preferred Stock to be converted. If required by the Company, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by the registered holder of his, her or its attorney duly authorized in writing. (~~a "~~c) Upon the Conversion ~~Notice")~~Date all outstanding Series B Preferred Stock shall immediately convert into Common Stock. ~~Following~~ Within ten (10) business days of the Conversion Date the Company shall provide notice to such holder of the Series B Preferred Stock that such conversion has occurred. Promptly following the receipt of ~~a Conversion Notice~~such notice from the Company that the Series B Preferred Stock has been converted into Common Stock, the ~~holders~~ holder of the Series B Preferred Stock shall surrender the certificate or certificates ~~therefor duly endorsed,~~ for such shares of Series B Preferred Stock at the office of the ~~Corporation or of any~~ Company's transfer agent (or at the principal office of the Company if the Company serves as its own transfer agent). If required by the Company, certificates surrendered for ~~such Series~~conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, ~~and shall state therein~~ in form satisfactory to the ~~name~~ Company, duly executed by the registered holder of his, her or ~~names~~ its attorney duly authorized in ~~which the certificate or certificates for shares of Common Stock are to be issued.~~ writing. (d) The ~~Corporation~~ Company shall, as soon as practicable ~~thereafter~~after the Conversion Date or any election to convert Series B Preferred Stock, and in all events within ten (10) business days of receipt of the certificate or certificates surrendered for conversion, issue and deliver at such office to ~~such holder, or to the nominee or nominees of~~ such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be ~~entitled as aforesaid. Such conversion~~ entitled; provided however, that the Company shall not be ~~deemed~~ obligated to ~~have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive~~ issue certificates evidencing the shares of Common Stock issuable upon conversion of any Series B Preferred Stock until the Series B Preferred Stock is either delivered to the Company or any transfer agent for the Series B Preferred Stock or Common Stock, or the Holder notifies the Company that such ~~conversion shall be treated for all purposes as~~ Series B Preferred Stock has been lost, stolen or destroyed and provides an agreement reasonably acceptable to the ~~recordholder or holders of such~~ Company to indemnify the Company from any loss incurred by it in connection therewith. No fractional shares of Common Stock shall be issuable upon a conversion hereunder and the number of shares to be issued shall be rounded up to the nearest whole share. If a fractional share interest arises upon any conversion hereunder, the Company shall eliminate such fractional share interest by causing to be issued to Holder an additional full share of Common Stock. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable and issued in compliance with all applicable laws including United States federal and state securities laws. Such equity securities, when so issued and delivered in accordance with the provisions hereof, shall be free and clear of all liens and encumbrances and adverse claims, other than restrictions on transfer created by applicable securities laws or by agreement and will not have been issued in violation of any preemptive rights or rights of first refusal or similar rights. (e) In case of any split or reclassification of the common stock, any conversion or consolidation or merger of the Company with or into another Person, the sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange, or any other action whatsoever, (each a “Reclassification Event”), then each holder of Series B Preferred Stock then outstanding shall have the right thereafter to convert such Series B Preferred Stock into the shares of stock and other securities and property receivable upon or deemed to be held by holders of common stock of the Company following such Reclassification Event, based on the conversion rate of 1,000 shares of Common Stock for each share of Series B Preferred Stock (in the event the property is cash, then the Holder shall have the right to convert the Series B Preferred Stock, based on the conversion rate of 1,000 shares of Common Stock for each share of Series B Preferred Stock, and receive cash in the same manner as other stockholders), so that the Holder shall be entitled upon such event to receive such amount of securities and property as the shares of the Common Stock into which such ~~date~~Series B Preferred Stock could have been converted immediately prior to such Reclassification Event would have been entitled. The terms of any such Reclassification Event shall include such terms so as to continue to give to the holder the right to receive the securities or property set forth in this Section III (e) upon any conversion following such Reclassification Event. This provision shall similarly apply to successive Reclassification Events. (f) The issuance of certificates or for shares of Common Stock ~~upon~~ on conversion ~~of shares~~ of Series B Preferred Stock shall be made without charge to the Holder for any ~~issue,~~ documentary stamp or ~~other~~ similar ~~tax~~ taxes that may be payable in respect of ~~such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and~~ the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time issue or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing delivery of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may becertificate, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock Company shall not be ~~sufficient~~ required to ~~effect the conversion~~ pay any tax that may be payable in respect of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, any transfer involved in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, issuance and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case delivery of any such ~~dividend or distribution, immediately after~~ certificate upon conversion in a name other than that of the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, Holder and the ~~denominator~~ Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of ~~which~~ such tax or shall be have established to the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate satisfaction of the ~~Conversion Price of~~ Company that such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have tax has been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionpaid. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Purchase Agreement (Unity Wireless Corp), Purchase Agreement (Unity Wireless Corp), Purchase Agreement (Unity Wireless Corp)

Conversion. The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be ~~availableto~~ available to the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Preferred Stock Purchase Agreement (Aames Financial Corp/De), Preferred Stock Purchase Agreement (Capital Z Financial Services Fund Ii Lp), Preferred Stock Purchase Agreement (Aames Financial Corp/De)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock~~ Before Investor shall be ~~convertible at the direction of, and by notice~~ entitled to ~~the Corporation from, the holders of a majority of the outstanding~~ convert this Note into shares of Series B Preferred Stock, it shall surrender this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note) and give written notice to the Company at ~~any time, at the~~ its principal corporate office of the ~~Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x)~~ election to ~~adjustment from time to time as provided below (as so adjusted,~~ convert the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion same pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"Section 4(a). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the ~~name or names in which~~ amount of the ~~certificate or certificates for shares~~ unpaid principal amount of ~~Common Stock are~~ this Note to be ~~issued~~converted. Upon such conversion of this Note, Investor hereby agrees, if requested by the Company, to execute and deliver to the Company, and if so executed and delivered, shall be bound upon such conversion by the obligations in, all transaction documents entered into by other purchasers of the Series B Preferred Stock (as may be amended), including the Series B Securities Purchase Agreement and other ancillary agreements, with customary representations and warranties and transfer restrictions, and shall be bound upon such conversion by any transfer restrictions applicable to any of the shares or holders thereof. The ~~Corporation~~ Company shall, ~~as soon as practicable thereafter~~within five business days, issue and deliver ~~at such office~~ to such ~~holder, or to the nominee or nominees of such holder,~~ Investor a certificate or certificates (or a notice of issuance of uncertificated shares or book entry confirmation statement from the Company’s transfer agent confirming the issuance of the shares, if applicable) for the number of shares ~~of Common Stock~~ to which ~~such holder~~ Investor shall be entitled upon such conversion, including a check payable to Investor for any cash amounts payable as ~~aforesaid~~described in Section 4(b)(ii). ~~Such~~ Any conversion of this Note pursuant to Section 4(a) shall be deemed to have been made ~~immediately prior to~~ upon the ~~close~~ satisfaction of ~~business~~ all of the conditions set forth in this Section 4(b)(i) and on and after such date the ~~date of such Conversion Notice and the person or persons~~ Persons entitled to receive the shares ~~of Common Stock~~ issuable upon such conversion shall be treated for all purposes as the ~~recordholder or holders~~ record holder of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuanceshares. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Note Purchase Agreement (Iridex Corp), Convertible Promissory Note (Iridex Corp), Convertible Promissory Note (Iridex Corp)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each share of Series B A Preferred Stock ~~shall~~ may be ~~convertible~~ converted, at the ~~direction of, and by notice to the Corporation from, the holders of a majority~~ option of the ~~outstanding shares of Series B Preferred Stock~~holder thereof, at any ~~time, at~~ time (i) after the ~~office~~ HSR Clearance Date or (ii) upon the transfer (in accordance with the provisions of the ~~Corporation~~ Stockholders Agreement) of such share of Series A Preferred Stock to a Person other than a Stockholder or any ~~transfer agent for such Series~~Affiliate thereof, in the manner hereinafter provided, into one ~~thousand~~ (~~1,000~~subject to any adjustment required below) fully paid and nonassessable share of Common Stock; provided, however, that on any liquidation of the Corporation, the right of conversion shall terminate at the close of business on the business day immediately preceding the date fixed for the payment of any amounts distributable on liquidation to the holders of the Series A Preferred Stock. (b) Each conversion of shares of Series A Preferred Stock into shares of Common Stock ~~subject (x) to adjustment from time to time as provided below (as so adjusted,~~ shall be effected by the ~~"conversion ratio") and (y) (~~prior to written notice thereof by the ~~consummation~~ holder of the ~~Recapitalization) to limitations resulting from~~ Series A Preferred Stock and the ~~available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all~~ surrender of the ~~outstanding~~ certificates representing the shares ~~of Series B Preferred Stock shall~~ to be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, converted at the principal office of the Corporation (or such other office or agency of the Corporation as the Corporation may designate by notice in writing to the holders of the Series A Preferred Stock as shown on the books of the Corporation) at any ~~transfer agent for such Series, and~~ time during normal business hours. Such notice shall state ~~therein~~ the name or names (with addresses) and denominations in which the certificate or certificates for such shares of Common Stock are to be ~~issued~~issued and shall include instructions for reasonable delivery thereof. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such Each conversion shall be deemed to have been ~~made immediately prior to~~ effected as of the close of business on the date on which such certificates have been surrendered and such notice has been received. At such time, the rights of the holder of the surrendered Series A Preferred Stock as such ~~Conversion Notice~~ holder shall cease, and the ~~person or persons entitled~~ Person in whose name the certificates for shares of Common Stock will be issued upon such conversion shall be deemed to ~~receive~~ have become the holder of record of the Common Stock represented thereby. (c) Promptly after the surrender of the certificates and the receipt of written notice, the Corporation shall issue and deliver in accordance with the surrendering holder's instructions (i) the certificates for the shares of Common Stock issuable upon such conversion ~~shall be treated for all purposes as the recordholder or holders of such~~ and (ii) certificates representing any surrendered shares of ~~Common~~ Series A Preferred Stock ~~as of~~ which were delivered to the Corporation in connection with such ~~date.~~ conversion but which were not requested to be converted and, therefore, were not converted. (d) The issuance of certificates ~~or shares of~~ for Common Stock upon conversion of ~~shares of~~ Series B A Preferred Stock shall be made without charge to the holders of such shares for any ~~issue, stamp or other similar~~ issuance tax in respect of thereof or other cost incurred by the Corporation in connection with such ~~issuance. C. No fractional shares shall be issued upon~~ conversion ~~of any shares of Series B Preferred Stock~~ and the ~~number~~ related issuance of shares of Common ~~Stock~~ Stock; provided that the Corporation shall not be required to pay any tax which may be ~~issued shall be rounded down to~~ payable in respect of any transfer involved in the ~~nearest whole share,~~ issuance and delivery of any certificate in a name other than that of the holder of the Series B A Preferred Stock ~~shall be paid in cash for any fractional share~~being converted. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (~~the time of mailing of such notice shall be deemed to be the time of giving thereof~~e) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of ~~effecting~~ issuance upon the conversion of the ~~shares of~~ Series B A Preferred Stock, such number of ~~its~~ shares of Common Stock ~~as shall from time to time be sufficient to effect the~~ issuable upon conversion of all outstanding ~~shares of~~ Series B A Preferred Stock~~, and if at any time the number of authorized but unissued~~ . All shares of Common Stock which are so issuable shall, when issued, be duly and validly issued fully paid and nonassessable and free from all taxes, liens and charges. The Corporation shall ~~not be sufficient to effect the conversion of~~ take all ~~then outstanding shares of Series B Preferred Stock, then in addition to~~ such ~~other remedies~~ actions as ~~shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel,~~ may be necessary to ~~increase its authorized but unissued~~ assure that all such shares of Common Stock ~~to such number~~ may be so issued without violation of any applicable law or governmental regulation or any requirement of any domestic securities exchange upon which shares as of Common Stock may be listed (except for official notice of issuance which shall be ~~sufficient for such purposes~~immediately transmitted by the Corporation upon issuance). ~~F. Any notice required by~~ (f) The Corporation shall not close its books against the ~~provisions of paragraph D to be given the holders~~ transfer of shares of Series B A Preferred Stock ~~shall be deemed given if sent by facsimile transmission, by telex, or if deposited~~ in any manner which would interfere with the ~~United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The~~ timely conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B A Preferred Stock. The Corporation shall assist and cooperate with any holder of Series A Preferred Stock ~~thereafter surrendered for conversion shall be entitled~~ required to ~~receive the number of shares of Common Stock~~ make any governmental filings or ~~other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of~~ obtain any ~~of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately~~ governmental approval prior to ~~the happening of such event~~ or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with ~~the issuance~~ any conversion of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series ~~B Preferred Stock, the Series C~~ A Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution hereunder (including, without limitation, making any ~~distribution of stock or other securities or property or rights or warrants~~ filings required to ~~subscribe for securities of the Corporation or any of its Subsidiaries~~ be made by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off). (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Restructuring, Financing and Distribution Agreement (Loral Corp /Ny/), Restructuring, Financing and Distribution Agreement (Lockheed Martin Corp), Restructuring, Financing and Distribution Agreement (Lockheed Martin Corp)

Conversion. ~~The holders~~ (a) At any time prior to the earlier to occur of a Stage 1 Qualifying Financing or the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ Maturity Date, the principal of ~~Series B Preferred Stock~~ and accrued interest on this Note shall be convertible at the ~~direction of~~election of the Maker (which shall occur only upon Maker's receipt of a request to do so from Investor and, ~~and by notice to the Corporation from~~as applicable, ~~the holders of~~ Other Investors, collectively holding a majority of the Convertible Preferred Stock outstanding ~~shares of Series B Preferred Stock, at any time,~~ at the ~~office~~ time of such request) into a number (rounded down in the ~~Corporation or~~ case of any ~~transfer agent for such Series, into one thousand (1,000~~fractional shares) of fully paid and ~~nonassessable~~ non-assessable shares of Common ~~Stock subject (x)~~ Stock, par value $.001 per EXECUTION VERSION share, of the Maker equal to ~~adjustment from time to time as provided below~~ the amount being converted divided by the Conversion Price (as ~~so adjusted,~~ defined herein). (b) At any time following the ~~"conversion ratio")~~ occurrence of a Stage 1 Qualifying Financing and ~~(y) (~~prior to the ~~consummation~~ earlier to occur of a Stage 2 Qualifying Financing or the ~~Recapitalization~~Maturity Date, the principal of and accrued interest on this Note shall be convertible at the election of Holder into a number (rounded down in the case of any fractional shares) ~~to limitations resulting from the available number~~ of fully paid and non-assessable shares of Common ~~Stock which may be reserved for issuance upon such conversion~~Stock, ~~provided ,that any conversion pursuant to this paragraph A of less than all~~ par value $.001 per share, of the ~~outstanding shares~~ Maker equal to the amount being converted divided by the Conversion Price. (c) At any time following the occurrence of ~~Series B Preferred Stock~~ a Stage 2 Qualifying Financing and prior to the Maturity Date, the principal of and accrued interest on this Note shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation~~ convertible at the election of the ~~Recapitalization~~Maker (which shall occur only upon Maker's receipt of a request to do so from Investor and, ~~the number "1,000" in this paragraph shall be "1"~~as applicable, ~~subject to adjustment as provided in paragraph VIII.G. B. If the holders of~~ Other Investors, collectively holding a majority of the Convertible Preferred Stock outstanding at the time of such request) into a number (rounded down in the case of any fractional shares) of fully paid and non-assessable shares of ~~Series B Preferred Stock give~~ Common Stock, par value $.001 per share, of the Maker equal to the amount being converted divided by the Conversion Price. (d) To effect the conversion of this Note, a written notice of conversion ~~under paragraph A above,~~ specifying the ~~Corporation shall notify all other record holders of Series B Preferred Stock~~ date on which such conversion is to be effected (a the "Conversion ~~Notice~~Date"~~). Following receipt~~ ) shall be delivered: (i) in the case of a ~~Conversion Notice~~conversion pursuant to Section 5(a) or 5(c), by the ~~holders~~ Maker to the Holder; and (ii) in the case of ~~Series B Preferred Stock~~ a conversion pursuant to Section 5(b), by the Holder to the Maker. The Holder shall surrender this Note to the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue Maker and deliver ~~at such office to such holder, or~~ a representation letter to the ~~nominee or nominees~~ Maker containing customary private placement representations and warranties so that the issuance of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock ~~issuable~~ upon conversion of this Note shall be exempt from registration under the Securities Act of 1933, as amended. Promptly following the Conversion Date, the Maker shall issue to the Holder the shares of Common Stock into which this Note has been converted, registered on the books of the Maker in the name of the Holder or its nominee and shall deliver the certificate(s) representing such ~~conversion~~ shares to the Holder at the address specified by the Holder. From and after the Conversion Date, the Holder shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification owner of the shares of Common Stock ~~any~~ into which this Note has been converted and the certificate(s) for such shares ~~of capital stock~~ shall be issued as of the ~~Corporation~~Conversion Date. (e) The Maker shall, ~~then, and in each such case, the conversion ratio in effect immediately~~ prior to ~~such event or the record date therefor~~any conversion of this Note, ~~whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the~~ have reserved a sufficient number of duly authorized shares of Common Stock ~~or other securities~~ to satisfy the conversion of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effectiveNote. (iif) ~~In the case the Corporation shall~~As used herein, ~~after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a~~ "Conversion Price" (means $0.10 per share, as ~~defined below) less than the Current Market Price (~~appropriately adjusted for ~~a period of 15 consecutive trading days prior to such date)~~stock splits, ~~then~~reverse stock splits, ~~and in each such case~~reclassifications, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) or other similar occurrences affecting the number of shares of Common Stock outstanding ~~on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued~~after April 26, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion2004. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Recapitalization Agreement (Northwest Biotherapeutics Inc), Recapitalization Agreement (Toucan Capital Fund II, LP), Convertible Secured Promissory Note (Northwest Biotherapeutics Inc)

Conversion. ~~The holders~~ (a) At the Payee’s option, at any time prior to payment in full of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ principal balance of ~~Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from~~this Note, the ~~holders of a majority~~ Payee may elect to convert all or any portion of the outstanding ~~shares~~ principal amount of ~~Series B Preferred Stock, at any time, at~~ this Note into that number of warrants (the ~~office~~ “Conversion Warrants”) equal to: (i) the portion of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation principal amount of the ~~Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion~~ Note being converted pursuant to this ~~paragraph A of less than all of~~ Section 15, divided by (ii) $1.00, rounded up to the ~~outstanding shares of Series B Preferred Stock~~ nearest whole number. Each Conversion Warrant shall be have the same terms and conditions as the warrants issued by the Maker to the Payee pursuant to a private placement, as described in Maker’s Registration Statement on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock Form S-1 (~~a "Conversion Notice"~~333-XXXXXX). ~~Following receipt of a~~ The Conversion ~~Notice~~Warrants, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock underlying the Conversion Warrants and any other equity security of Maker issued or issuable ~~upon~~ with respect to the foregoing by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, amalgamation, consolidation or reorganization (the “Warrant Shares”), shall be entitled to the registration rights set forth in Section 16 hereof. (b) Upon any complete or partial conversion of the principal amount of this Note, (i) such principal amount shall be so converted and such converted portion of this Note shall become fully paid and satisfied, (ii) the Payee shall surrender and deliver this Note, duly endorsed, to Maker or such other address which Maker shall designate against delivery of the Conversion Warrants, (iii) Maker shall promptly deliver a new duly executed Note to the Payee in the principal amount that remains outstanding, if any, after any such conversion ~~shall be treated~~ and (iv) in exchange for all ~~purposes~~ or any portion of the surrendered Note, Maker shall deliver to Payee the Conversion Warrants, which shall bear such legends as are required, in the ~~recordholder~~ opinion of counsel to Maker or ~~holders~~ by any other agreement between Maker and the Payee and applicable state and federal securities laws. (c) The Payee shall pay any and all issue and other taxes that may be payable with respect to any issue or delivery of ~~such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock~~ the Conversion Warrants upon conversion of ~~shares of Series B Preferred Stock~~ this Note pursuant hereto; provided, however, that the Payee shall not be ~~made without charge for~~ obligated to pay any ~~issue, stamp or other similar tax~~ transfer taxes resulting from any transfer requested by the Payee in ~~respect of~~ connection with any such ~~issuance~~conversion. ~~C. No fractional shares~~ (d) The Conversion Warrants shall not be issued upon conversion of ~~any shares of Series B Preferred Stock~~ this Note unless such issuance and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation such conversion comply with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the applicable provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporationlaw. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Expense Advancement Agreement (Leisure Acquisition Corp.), Expense Advancement Agreement (Leisure Acquisition Corp.), Expense Advancement Agreement (Leisure Acquisition Corp.)

Conversion. (a) The ~~holders~~ Holder of this Note is entitled at any time before the close of business on the date this Note is paid in full pursuant to the terms hereof, but prior to such payment (or, if the Holder has exercised his right to require the Company to redeem this Note or a portion hereof pursuant to Section 2 hereof, then in respect of this Note or such portion hereof, until and including, but (unless the Company defaults in making the payment due upon redemption) not after, 5:00 p.m., New York City time, on the Business Day prior to the Redemption Date), to convert this Note (or any portion of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ principal amount hereof that is an integral multiple of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series$1,000), into ~~one thousand (1,000)~~ fully paid and nonassessable Common Stock (as hereinafter defined) of the Company at the rate of 166.6667 shares of Common Stock for each $1,000 principal amount of this Note (or at the then current adjusted rate if an adjustment has been made as provided below) (the "Conversion Rate") by surrender of this Note accompanied by written notice to the Company that the Holder hereof elects to convert this Note (or if less than the entire principal amount hereof is to be converted, specifying the portion hereof to be converted). If less than the entire principal amount of this Note is to be converted, it shall be surrendered to the Company at the Designated Office (with, if the Company so requires, due endorsement by, or a written instrument of transfer in form reasonably satisfactory to the Company duly executed by the Holder hereof or his attorney duly authorized in writing), and the Company shall execute and make available for delivery to the Holder without service charge, a new Note, containing identical terms and conditions, each in an authorized denomination in aggregate principal amount equal to and in exchange for the unconverted portion of the principal of the Note so surrendered. The Company shall deliver to the Holder of this Note as soon as practicable after delivery by the Holder of this Note to the Company, but not more than fifteen (15) Trading Days after such delivery, the certificates representing shares of Common Stock issuable upon conversion of this Note and cash in lieu of any fractional shares. (b) The Conversion Rate will be subject ~~(x)~~ to ~~adjustment~~ adjustments from time to time as ~~provided below~~ follows: (1) If the Company shall pay or make a dividend or other distribution on Common Stock of the Company payable in Common Stock, the Conversion Rate in effect at the opening of business on the day following the Determination Date (as ~~so adjusted~~hereinafter defined) for such dividend or other distribution shall be increased by dividing such Conversion Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date and the denominator shall be the sum of such number of shares of Common Stock and the total number of shares of Common Stock constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following such Determination Date. (2) If the Company shall issue rights, options or warrants to holders of its Common Stock entitling them to subscribe for or purchase Common Stock at a price per share less than the current market price per share (determined as provided in paragraph (7) of this Section 1(b)) of the Common Stock on the Determination Date for such distribution, the ~~"conversion ratio") and (y) (prior to~~ Conversion Rate in effect at the ~~consummation~~ opening of business on the ~~Recapitalization) to limitations resulting from~~ day following such Determination Date shall be increased by dividing such Conversion Rate by a fraction of which the ~~available~~ numerator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock which ~~may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all~~ the aggregate of the ~~outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation~~ offering price of the ~~Recapitalization, the~~ total number ~~"1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders~~ of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock ~~are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver~~ so offered for subscription or purchase would purchase at such ~~office to such holder, or to~~ current market price and the ~~nominee or nominees of such holder, a certificate or certificates for~~ denominator shall be the number of shares of Common Stock outstanding at the close of business on such Determination Date plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following such Determination Date. Upon the expiration of any right, option or warrant to purchase Common Stock the issuance of which resulted in an adjustment to the Conversion Rate pursuant to this paragraph (2) of Section 1(b), if any such right, option or warrant shall expire and shall not have been exercised, the Conversion Rate shall immediately upon such expiration be recomputed to the Conversion Rate which would have been in effect had the adjustment of the Conversion Rate made upon the issuance of such right, option or warrant been made on the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of such right, option and warrant actually exercised. (3) If the outstanding Common Stock of the Company shall be subdivided into a greater number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and, conversely, if outstanding Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (4) If the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness, shares of any class of capital stock, or other property (including securities, but excluding (i) any rights, options or warrants referred to in paragraph (2) of this Section 1(b), (ii) any dividend or distribution paid exclusively in cash, (iii) any dividend or distribution referred to in paragraph (1) of this Section 1(b) and (iv) any merger or consolidation to which ~~such holder~~ Section 1(f) applies (the "Distributed Property"), the Conversion Rate shall be ~~entitled as aforesaid. Such conversion~~ adjusted so that the same shall equal the rate determined by dividing the Conversion Rate in effect immediately prior to the close of business on the Determination Date for such distribution by a fraction of which the numerator shall be ~~deemed~~ the current market price per share (determined as provided in paragraph (7) of this Section 1(b)) of the Common Stock on such Determination Date less the then fair market value of the portion of the assets, shares or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such current market price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following such Determination Date; provided, however, that if the Distributed Property consists of shares of capital stock of a subsidiary, the Company will make adequate provision so that the Holder shall have the right to receive upon conversion the amount of such shares of capital stock that such Holder would have received if such Holder had converted such Note on the record date, in which case there will be no adjustment to the Conversion Price. Under the provisions of the Company's Rights Plan, upon conversion of the Note into Common Stock, to the extent that the Rights Plan is still in effect upon such conversion, the Holder will receive, in addition to the Common Stock, the rights described therein (whether or not the rights have separated from the Common Stock at the time of conversion), subject to the limitations set forth in the Rights Plan. Any distribution of rights or warrants pursuant to the Rights Plan in compliance with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants pursuant to this Section 1(b). (5) If the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed as part of a distribution referred to in paragraph (4) of Section 1(b)) in aggregate amount that, combined together with (I) the aggregate amount of any other cash distributions to all holders of its Common Stock made exclusively in cash within the twelve (12) months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (5) of Section 1(b) has been made and (II) the aggregate of any cash plus the fair market value of consideration payable in respect of any tender offer by the Company or any of its subsidiaries for all or any portion of the Common Stock (other than Common Stock purchased by the Company at or below fair market value) concluded within the twelve (12) months preceding the date of payment of such distribution (the "combined cash amount"), exceeds fifty percent (50%) of the net earnings of the Company determined in accordance with GAAP for the trailing twelve month period preceding the date of such distribution (the "aggregate earnings"), then, and in each such case, immediately after the close of business on such date for determination, the Conversion Rate shall be adjusted so that the same shall equal the rate determined by dividing the Conversion Rate in effect immediately prior to the close of business on the date ~~of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated~~ fixed for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification determination of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock stockholders entitled to receive such ~~dividend or distribution, or~~ distribution by a fraction (yi) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be equal to the ~~sum~~ current market price per share of ~~(1)~~ the ~~number of shares of~~ Common Stock ~~outstanding~~ on the date ~~on which~~ fixed for such ~~shares or Convertible Securities are issued and (2)~~ determination less an amount equal to the ~~number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum~~ quotient of (x) the excess of such combined cash amount over the aggregate earnings divided by (y) the number of shares of Common Stock outstanding on such date for determination and (yii) the denominator of which shall be equal to the current market price per share of the Common Stock on such date for determination. (6) If the Company issues Common Stock or securities (including options and warrants) convertible into, or exchangeable for, Common Stock at a price per share (or having a conversion or exchange price per share) that is less than the fair market value per share of the Common Stock at the date of issuance (but excluding issuances: (a) pursuant to any bona fide plan for the benefit of employees or directors of the Company now in effect or any comparable plans adopted in the future, provided such future plans contain terms and conditions that, taken as a whole, are no more favorable than the Company's current plans; (b) to acquire all or any portion of a business in an arm's-length transaction between the Company and an unaffiliated third party including, if applicable, issuances upon exercise of options or warrants assumed in connection with such an acquisition; and (c) pursuant to the exercise of warrants, rights or options, or upon the conversion of convertible securities, which are issued and outstanding on the date hereof, or which may be issued in the future at fair value and with an exercise price or conversion price at least equal to the current market price per share (determined as provided in paragraph (7) of this Section 1(b)) of the Common Stock at the time of issuance of such warrant, right, option or convertible security, the Conversion Rate in effect at the opening of business on the day following the date on which any such issuance is made shall be increased by multiplying such Conversion Rate by a fraction of which the numerator shall be the sum of the number of shares of Common Stock (assuming for purposes hereof the conversion or exercise of all outstanding securities convertible into or exchangeable for Common Stock) outstanding on such date plus the number of additional shares of Common Stock issued (or into which the convertible securities may convert), and the denominator of which shall be the sum of the number of shares of Common Stock (assuming for purposes hereof the conversion or exercise of all outstanding securities convertible into or exchangeable for Common Stock) outstanding on such date plus the number of shares of Common Stock which the aggregate consideration receivable by the ~~Corporation~~ Company for the total number of shares of Common Stock so ~~issued,~~ issued (or ~~the number of shares of Common Stock~~ into which the ~~aggregate of the Conversion Price of such Convertible Securities so issued,~~ convertible securities may convert) would purchase at ~~such Current Market price~~ the fair market value per share of the Common Stock on such date. An adjustment made pursuant to this ~~clause~~ paragraph (ii6) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this ~~clause~~ paragraph (ii6), the aggregate consideration receivable by the ~~Corporation~~ Company in connection with the issuance of ~~any~~ shares of Common Stock or of securities convertible into shares of Common Stock shall be deemed to be equal to the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) of all such securities plus the minimum aggregate ~~amount of additional consideration~~amount, if any, payable ~~to the Corporation~~ upon ~~the conversion, exchange or exercise~~ conversion of any such ~~Convertible Securities. Neither (A) the issuance of any~~ convertible securities into shares of Common ~~Stock~~ Stock. (~~whether treasury shares~~ 7) For the purpose of any computation under paragraphs (2), (4), (5) or ~~newly issued shares~~(6) ~~pursuant to a dividend or distribution on, or subdivision, combination or reclassification of~~of this Section 1(b), the ~~outstanding shares~~ current market price per share of Common Stock ~~requiring an adjustment in~~ on any date shall be deemed to be the ~~conversion ratio pursuant to clause~~ average of the daily Closing Prices for the five (5) consecutive Trading Days commencing ten (10) Trading Days before the earlier of (i) the day in question and (ii) the day before the "ex" date with respect to the issuance or distribution requiring such computation. For purposes of this ~~paragraph G~~paragraph, the term "ex date", when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way in the applicable securities market or on the applicable securities exchange without the right to receive such issuance or distribution. (c) The Company shall promptly notify the Holder pursuant to Section 8(b) of any ~~employee benefit plan or program~~ adjustment to the Conversion Rate required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 1(b). (d) The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of the ~~Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to~~Note, the ~~Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance~~ full number of shares of Common Stock ~~pursuant thereto~~ then issuable upon the conversion of this Note. (e) The Company agrees that all Common Stock which may be delivered upon conversion of the Note, upon such delivery, will have been duly authorized and validly issued and will be fully paid and nonassessable and free of preemptive rights (and shall be ~~deemed to constitute an issuance~~ issued out of the Company's authorized but unissued Common Stock). (f) In the event of any recapitalization or reclassification of the Common Stock (other than a change in par value, or ~~Convertible Securities~~ as a result of a subdivision or combination covered by ~~the Corporation to which~~ paragraph (3) of this ~~clause~~ Section 1(b)) (~~ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii~~collectively, a "Capital Reorganization"), the ~~Conversion Price computed upon~~ Company shall execute and deliver to the ~~original issue thereof shall upon expiration be recomputed as if~~ Holder a supplemental agreement providing that the ~~only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and~~ Holder has the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principlesright thereafter, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this ~~paragraph G, then, and in each such case, the conversion ratio~~ Note shall be ~~adjusted so that~~ convertible as specified in Section 1(a), to convert this Note only into the kind and amount of securities, cash and other property receivable upon such Capital Reorganization by a holder of ~~each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof,~~ the number of shares of Common Stock ~~determined by multiplying (1)~~ of the ~~applicable conversion ratio on the day~~ Company into which this Note might have been converted immediately prior to such Capital Reorganization, and, if holders of the ~~record date fixed for~~ Company's Common Stock are given the ~~determination~~ right to elect the kind or amount of ~~stockholders entitled to receive~~ securities, cash or other property receivable upon such ~~dividend or distribution by (2) a fraction~~Capital Reorganization, then the ~~numerator of which~~ Holder shall be provided the ~~then Current Market Price per share~~ right to so elect and notice of ~~Common Stock for~~ such right to elect on the ~~period of 20 Trading Days preceding such record date,~~ same terms and conditions offered to the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors holders of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Company's Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (ivg) ~~For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding~~ The Company shall not ~~include any shares of Common Stock then owned or held~~ consummate a transaction pursuant to which it is acquired by or ~~for~~ merged or consolidated into another Person or convey, transfer or sell all or substantially all of its assets (an "Acquisition Event"), unless the ~~account of the Corporation.~~successor Person (or its ultimate parent, if applica

Appears in 3 contracts

Sources: Security Agreement (Scansoft Inc), Purchase Agreement (Scansoft Inc), Purchase Agreement (Scansoft Inc)

Conversion. (a) The ~~holders~~ outstanding principal amount of this Note may be converted in whole or in part by the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, Investor into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject~~ of LTC (~~x) to adjustment from time to time as provided below (as so adjusted,~~ the "~~conversion ratio~~Conversion Shares") ~~and~~ at the conversion price equal to $.10 per share (ythe "Conversion Price") at any time after the date hereof. (~~prior to~~ b) The outstanding principal of this Note shall automatically convert into Conversion Shares at the ~~consummation~~ Conversion Price on the first anniversary of the ~~Recapitalization) to limitations resulting from the available~~ date that LTC has increased its number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of authorized shares of Common Stock to a number sufficient to issues shares of Common Stock to all holders of LTC convertible securities including the Notes (the "Maturity Date"). (c) In order to effect the conversion of all or part of the Note, Investor shall issue a notice of conversion substantially in the form attached hereto (the "Notice of Conversion") which ~~such holder shall~~ may be ~~entitled as aforesaid~~by facsimile and surrender the Note for conversion if the Note is not already in possession of LTC. ~~Such~~ Each conversion ~~shall~~ of all or any portion of the Note will be deemed to have been ~~made immediately prior to~~ effected as of the close of business on the date on which the Note has been surrendered at the principal office of LTC. At such ~~Conversion Notice~~ time as such conversion has been effected, to the extent that any portion of the Note is converted, the rights of Investor with respect to such portion of the Note shall cease and Investor shall be deemed to have become the ~~person or persons entitled to receive~~ holder of record of the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuanceConversion Shares represented thereby. C. (d) No fractional ~~shares~~ Common Shares shall be issued upon conversion of the Note. In lieu of any ~~shares of Series B Preferred Stock and~~ fractional share to which the ~~number of shares of Common Stock to~~ holder would otherwise be ~~issued~~ entitled, LTC shall ~~be rounded down~~ round up to the nearest whole ~~share~~Common Share. (e) Within ten days after a conversion has been effected, LTC will deliver to Investor: (i) a certificate or certificates representing the number of Conversion Shares issuable by reason of conversion in the name of Investor and in such denomination or denominations as Investor has specified; and (ii) a new Note representing any principal balance which was not converted into Conversion Shares in connection with such conversion; all other terms and conditions of the Note will remain in full force and effect. (f) The issuance of certificates for Conversion Shares upon conversion of the Note will be delivered by LTC within ten days of the date of conversion and will be made without charge to Investor for any issuance tax in respect thereof or other cost incurred by LTC in connection with such conversion and the ~~holder~~ related issuance of ~~Series B Preferred Stock shall be paid in cash for any fractional share~~Conversion Shares. ~~D. In case~~ (g) The Conversion Price in effect at any time ~~or from time to time~~ and the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class number and kind of securities ~~any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification~~ purchasable upon the exercise of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio Note shall be subject to adjustment from time to time upon the happening of certain events as ~~follows~~follows after the date hereof and through and including the Maturity Date: (i) In case ~~the Corporation~~ LTC shall ~~at any time or from time to time after the Issue Date~~ (A1) ~~pay~~ declare a dividend or make a ~~distribution,~~ distribution on ~~the~~ its outstanding shares of Common Stock in shares of Common Stock, (B2) subdivide ~~the~~ or reclassify its outstanding shares of Common Stock into a ~~larger~~ greater number of ~~shares of Common Stock~~shares, or (C3) combine ~~the~~ or reclassify its outstanding shares of Common Stock into a smaller number of ~~shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case~~shares, the ~~conversion ratio~~ Conversion Price in effect ~~immediately prior to such event or~~ at the time of the record date ~~therefor~~for such dividend or distribution or of the effective date of such subdivision, ~~whichever is earlier,~~ combination or reclassification shall be adjusted so that it shall equal the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying ~~(A)~~ the ~~applicable conversion ratio on the day immediately prior to such date~~ Conversion Price by ~~(B)~~ a fraction, the ~~numerator~~ denominator of which shall be ~~the sum of (1)~~ the number of shares of Common Stock outstanding ~~on the date on which~~ after giving effect to such ~~shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert~~action, and the ~~denominator~~ numerator of which shall be ~~the sum of (x)~~ the number of shares of Common Stock ~~outstanding on~~ immediately prior to such ~~date and~~ action. Such adjustment shall be made each time any event listed above shall occur. (yii) Whenever the Conversion Price is adjusted pursuant to Subsection (i) above, the number of ~~shares~~ Conversion Shares purchasable upon conversion of ~~Common Stock which~~ the ~~aggregate consideration receivable~~ Note shall simultaneously be adjusted by ~~the Corporation for the total number of shares of Common Stock so issued, or~~ multiplying the number of ~~shares~~ Conversion Shares initially issuable upon conversion of ~~Common Stock which~~ the ~~aggregate of~~ Note by the Conversion Price ~~of such Convertible Securities so issued, would purchase at such Current Market price~~ in effect on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof ~~(including, but not limited to,~~ and dividing the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities product so obtained by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii)Conversion Price, ~~the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed~~ as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionadjusted. (iii) In All calculations under this Section 3(g) shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. (iv) Whenever the ~~Corporation~~ Conversion Price is adjusted, as herein provided, LTC shall ~~at any time or from time to time after~~ promptly cause a notice setting forth the ~~Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution~~ adjusted Conversion Price and adjusted number of ~~stock or other securities or property or rights or warrants to subscribe for securities~~ Conversion Shares issuable upon exercise of the ~~Corporation or any~~ Note to be mailed to Investor, at its last address appearing in LTC's register. LTC may retain a firm of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith independent certified public accountants selected by the Board of Directors (who may be the regular accountants employed by LTC) to make any computation required by this Section. In the case of a dispute as to the adjustment of the ~~Corporation~~Conversion Price, ~~a certified resolution~~ the parties hereto agree to arbitrate the same in an office of the American Arbitration Association in New York, New York utilizing its commercial arbitration rules with ~~respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend~~ an arbitrator selected by the parties or ~~distribution; provided, however, that~~ in the event ~~of a distribution of shares of capital stock of a Subsidiary of~~ that they are unable to do so, by the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffAmerican Arbitration Association. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Note Purchase and Sale Agreement (Lithium Technology Corp), Note Purchase and Sale Agreement (Lithium Technology Corp), Note Purchase and Sale Agreement (Lithium Technology Corp)

Conversion. ~~The holders~~ Notwithstanding any covenants in this Agreement requiring Cartus, CFC or ARSC to maintain its “corporate existence”, such entity may elect to convert their status from that of a Delaware corporation to that of a Delaware limited liability company, either by filing a certificate of conversion with the ~~Series B Preferred Stock shall have~~ Delaware Secretary of State or by merging with and into a newly formed Delaware limited liability company(such conversion ~~rights~~ or merger, as ~~follows~~applicable, being herein called a “Conversion”) subject to the conditions that: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (~~1,000~~a) ~~fully paid and nonassessable shares of Common Stock subject~~ (x) ~~to adjustment from time to time as provided below~~ the Person formed by such Conversion (~~as so adjusted~~any such Person, the ~~"conversion ratio"~~“Surviving Entity”) is an entity organized and existing under the laws of the United States of America or any State thereof, (y) such Surviving Entity expressly assumes, by an agreement in form and substance satisfactory to the applicable transferee and its assignees, performance of every covenant and obligation of such Person under the Transaction Documents to which such Person is a party and (z) such Surviving Entity delivers to the other parties to the Fifth Omnibus Amendment hereto dated as of April 10, 2007 (such parties, the “Amendment Parties”) an opinion of counsel that such Surviving Entity is duly organized and validly existing under the laws of its organization, has duly executed and delivered such supplemental agreement, and such supplemental agreement is a valid and binding obligation of such Surviving Entity, enforceable against such Surviving Entity in accordance with its terms (subject to customary exceptions relating to bankruptcy and equitable principles) and covering such other matters as the Amendment Parties may reasonably request; (b) all actions necessary to maintain the perfection of the security interests or ownership interests created by such Person under the Transaction Documents to which such Person is a party in connection with such Conversion shall have been taken, as evidenced by an opinion of counsel reasonably satisfactory to the Amendment Parties; (c) so long as such Person is the Servicer, no Servicer Default or Unmatured Servicer Default is then occurring or would result from such Conversion; (d) in the case of a Conversion of CFC or ARSC, (x) the organizational documents of any Surviving Entity with respect to CFC or ARSC shall contain limitations on its business activities and requirements for independent directors or managers substantially equivalent to those set forth in its current organizational documents, and (y) ~~(prior~~ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall have delivered an opinion of counsel reasonably satisfactory to the ~~consummation~~ Amendment Parties that such Conversion will not, in and of itself, alter the ~~Recapitalization~~conclusions set forth in its opinions previously issued in connection with the Transaction Documents with respect to true sale matters, substantive consolidation matters and bankruptcy issues relating to “home sale proceeds” (to the extent such opinions relate to such Person); and (e) ~~to limitations~~ each Amendment Party shall have received such other documents as such Amendment Party may reasonably request. In connection with any such Conversion and the resulting ~~from the available number~~ change in name of ~~shares of Common Stock which may be reserved for issuance upon~~ such ~~conversion~~entity, ~~provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock~~ Cartus, CFC and/or ARSC, as applicable, shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject~~ required to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein comply with the name ~~or names~~ change covenants in ~~which~~ the ~~certificate or certificates for shares of Common Stock are to be issued. The Corporation shall~~Transaction Documents, ~~as soon as practicable thereafter, issue and deliver at such office to such holder, or~~ except that to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' extent 30 days prior written notice (of the ~~time of mailing of~~ name change is required, such notice period shall be reduced to five Business Days. From and after any such Conversion effected in compliance with the above conditions, (a) all references in the Transaction Documents to any Person which has altered its corporate structure to become a limited liability company shall be deemed to be ~~the time of giving thereof)~~ references to the ~~registered holders~~ Surviving Entity as successor to such Person, (b) all representations, warranties and covenants in the Transaction Documents which state that any of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close Cartus, CFC or ARSC is or is required to be a ~~record~~ corporation shall be ~~taken for~~ deemed to permit and require the Surviving Entity to be a limited liability company, (c) all references to such ~~stock dividend~~Person’s certificate of incorporation, ~~distribution~~ other organizational documents, capital stock, corporate action or ~~subscription rights~~ other matters relating to its corporate form will be deemed to be references to the organizational documents and analogous matters relating to limited liability companies, (d) all references to such Person’s directors or ~~(ii) such reorganization~~independent directors will be deemed to be references to the Surviving Entity’s directors, ~~reclassification~~independent directors, ~~consolidation, merger, sale~~ managers or ~~conveyance, dissolution, liquidation or winding up shall take place~~independent managers, as the case may bebe and (e) no representation, ~~provided that~~ warranty or covenant in ~~the case of~~ any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities Document shall be deemed to be ~~the sum~~ breached or violated solely as a result of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so fact that the ~~holder of each share of Series B Preferred Stock shall~~ Surviving Entity in any Conversion may be ~~entitled to receive~~disregarded as a separate entity for state, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend local or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offfederal income tax purposes. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 3 contracts

Sources: Omnibus Amendment (Domus Holdings Corp), Omnibus Amendment (NRT Settlement Services of Missouri LLC), Omnibus Amendment (Realogy Corp)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each share of ~~Series~~ Class B ~~Preferred~~ Common Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one ~~thousand~~ (~~1,000~~1) fully paid and nonassessable ~~shares~~ share of Class A Common Stock ~~subject (x) to adjustment from~~ at the option of the holder thereof at any time ~~to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior~~ upon written notice to the ~~consummation~~ Corporation. Before any holder of ~~the Recapitalization) to limitations resulting from the available number of shares of~~ Class B Common ~~Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred~~ Stock shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject~~ entitled to ~~adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding~~ convert any shares of ~~Series~~ such Class B ~~Preferred Stock give notice of conversion under paragraph A above~~Common Stock, ~~the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock~~ such holder shall surrender the certificate or certificates ~~therefor~~ therefor, duly endorsed, at the principal corporate office of the Corporation or of any transfer agent for ~~such Series~~the Class B Common Stock, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Class A Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such ~~holder~~holder of Class B Common Stock, or to the nominee or nominees of or such holder, a certificate or certificates for the number of shares of Class A Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such ~~Conversion Notice~~ surrender of the shares of Class B Common Stock to be converted, and the person or persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such shares of Class A Common Stock as of such date. Each share of Class B Common Stock that is converted pursuant to this Section 5(a) shall be retired by the Corporation and shall not be available for reissuance. (b) Each share of Class B Common Stock shall be automatically, without further action by the holder thereof, converted into one (1) fully paid and nonassessable share of Class A Common Stock, upon the occurrence of a Transfer (as defined in Section (E)(2) of this Article IV), other than a Permitted Transfer (as defined in Section (E)(3) of this Article IV), of such share of Class B Common Stock. Each outstanding stock certificate that, immediately prior to such Transfer, represented one or more shares of Class B Common Stock subject to such Transfer shall, upon and after such Transfer, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation shall, upon the request of each such holder and upon receipt of such holder’s outstanding certificate, issue and deliver to such holder new certificates representing such holder’s shares of Class A Common Stock. Each share of Class B Common Stock that is converted pursuant to this Section (B)(5)(b) of Article IV shall be retired by the Corporation and shall not be available for reissuance. (c) The Corporation may, from time to time, establish such policies and procedures, not in violation of applicable law or the other provisions of this Restated Certificate of Incorporation, relating to the conversion of the Class B Common Stock into Class A Common Stock and the dual class common stock structure contemplated by this Restated Certificate of Incorporation, including without limitation the issuance of stock certificates in connection with any such conversion, as it may deem necessary or ~~shares of Common Stock upon~~ advisable. If the Corporation has reason to believe that a Transfer giving rise to a conversion of shares of ~~Series~~ Class B ~~Preferred~~ Common Stock into Class A Common Stock has occurred but has not theretofore been reflected on the books of the Corporation, the Corporation may request that the holder of such shares furnish affidavits or other evidence to the Corporation as it reasonably deems necessary to determine whether a conversion of shares of Class B Common Stock to Class A Common Stock has occurred, and if such holder does not within ten (10) days after the date of such request furnish sufficient evidence to the Corporation (in the manner provided in the request) to enable the Corporation to determine that no such conversion has occurred, any such shares of Class B Common Stock, to the extent not previously converted, shall be ~~made without charge for~~ automatically converted into shares of Class A Common Stock and the same shall thereupon be registered on the books and records of the Corporation. In connection with any ~~issue~~action of stockholders taken at a meeting or by written consent, ~~stamp or other similar tax in respect~~ the stock ledger of ~~such issuance. C. No fractional shares~~ the Corporation shall be ~~issued upon conversion~~ presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders or in connection with any written consent and the classes of shares ~~of Series B Preferred Stock~~ held by each such stockholder and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other each class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by ~~or for the account of the Corporation~~such stockholder.

Appears in 2 contracts

Sources: Unsecured Pik Convertible Notes Purchase Agreement (Uber Technologies, Inc), Unsecured Pik Convertible Notes Purchase Agreement (Uber Technologies, Inc)

Conversion. ~~The holders~~ If any holder of ~~the Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ full or fractional shares of Series ~~B Preferred~~ C Stock ~~shall be convertible at the direction of, and by notice~~ surrenders to the Corporation ~~from,~~ (at the ~~holders of a majority~~ principal office of the ~~outstanding~~ Corporation) certificate or certificates representing all or part of the holder's shares of Series ~~B Preferred Stock, at any time, at~~ C Stock together with either (1) a certificate stating that the ~~office~~ holder has received the advice of counsel to the effect that it is permissible under the federal banking laws and regulations applicable to the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series ~~B Preferred Stock~~C Stock represented by such certificate or certificates convert as contemplated by this Section 6 or (2) a certificate stating that the holder is transferring the holders' shares in a Widely Dispersed Offering (as defined below) and subsequently transfers the shares in a Widely Dispersed Offering, ~~such number of its shares of Common Stock as shall from time to time be sufficient to effect~~ then the ~~conversion of all outstanding~~ shares of Series ~~B Preferred Stock, and if at any time the number of authorized but unissued shares of Common~~ C Stock ~~shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to~~ represented by such ~~other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation~~ certificate or certificates will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time convert as follows: (ia) ~~In case~~ If at the ~~Corporation shall at any~~ time ~~or from time to time after~~ of conversion the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B ~~Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities~~ junior voting preferred stock, par value $0.01 per share, of the Corporation ~~which such holder would have owned or have been entitled to receive after~~ (the ~~happening of any~~ "Series B Stock") has not converted into the "Reference Package" of the ~~events described above, had such shares of~~ Series B ~~Preferred~~ Stock ~~been surrendered for conversion immediately prior~~ in accordance with the terms of the certificate of incorporation of the Corporation relating to the ~~happening of such event or the record date therefor~~Series B Stock, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series ~~B Preferred~~ C Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such ~~Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause~~ holder will convert into one share (~~ii) shall be made on the next Business Day following the date on which~~ and any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale fractional share of such ~~Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus~~ holder will convert into the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the same fraction of a share) of Series B Stock; and (b) Otherwise, each share of Series C Stock of such holder will convert into the Reference Package (and any fractional share of such holder will convert into the same fraction of the Reference Package). The holder will be entitled to receive, as applicable, (1) a certificate or certificates representing the Series B Stock into which such shares have been converted or (2) a certificate or certificates representing any capital stock comprising a part of the ~~Subsidiary~~ Reference Package and into which ~~is distributed~~ their shares have been converted (and, in ~~such Spin-Off in respect~~ the case of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (~~iii) shall be made upon the opening of business on the next Business Day following the date on which~~ 2), any ~~such dividend~~ cash or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.other property then

Appears in 2 contracts

Sources: Investment Agreement (Dime Bancorp Inc), Investment Agreement (Warburg Pincus Equity Partners Lp)

Conversion. The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, If at any time, ~~at the office~~ Funder’s ownership of the ~~Corporation~~ share capital of the Company on an issued and outstanding basis falls or is reasonably expected to fall below 50.1%, solely as a result of the exercise of existing or future options (or an equivalent instrument) or as a result of issuance of restricted, shares, restricted stock units (or an equivalent instruments) under the Company’s 2018 Share Option Plan or an equivalent plan adopted by the Company’s board of directors (a “Trigger Event”), Funder may, in its sole discretion, convert all or any ~~transfer agent for~~ portion of the outstanding Principal amount (such ~~Series~~portion of Principal amount that is so converted, the “Convertible Amount”) into ~~one thousand (1,000) fully paid and nonassessable~~ shares of ~~Common Stock subject~~ the Company’s most senior class of Preferred Shares (~~x) to adjustment~~ as such term is defined under the Company’s then current articles of association, as may be amended from time to time ~~as provided below~~ (~~as so adjusted,~~ the ~~"conversion ratio"~~“Articles”) and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made existing immediately prior to ~~the close of business on the date~~ such conversion. The number of such ~~Conversion Notice and the person or persons entitled~~ shares to ~~receive the shares of Common Stock issuable~~ be issued upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down equal to the ~~nearest whole share, and~~ quotient obtained by dividing the ~~holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution~~ Convertible Amount by a price per share equal to the ~~holders~~ higher of ~~its Common Stock~~ (i) the Original Issue Price of the Preferred B Shares –(or ~~other~~ the Conversion Price of the Preferred B Shares, if such Conversion Price is lower than the Original Issue Price) (as such terms are defined in the Articles); and (ii) a price that reflects a discount of 20% (twenty percent) on the Original Issue Price of the Company’s most senior class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give Preferred Shares at ~~least 20 days' prior written notice (~~the time of ~~mailing~~ conversion that are issued in a bona fide financing, so that, following such conversion, Funder shall regain 50.1% of ~~such notice~~ Company’s issued and outstanding share capital. The Convertible Amount shall be deemed to be repaid at the time of ~~giving thereof~~conversion. For as long as the Principal amount has not been repaid or converted in full, the Company shall deliver a thirty (30) days prior written notice to the ~~registered holders~~ Funder, or shorter notice if thirty (30) days is not practically possible, of any contemplated Trigger Event. The conversion right of the ~~Series B Preferred Stock at~~ Funder described in this Section ‎2, shall not apply in case the ~~addresses of each as shown on the books~~ Funder’s ownership of the ~~Corporation maintained by the Transfer Agent thereof~~ share capital of the ~~date~~ Company on ~~which~~ an issued and outstanding basis falls below 50.1% due to exercise of options or an equivalent instrument immediately prior to, and contingent upon, a consummation of subsections (i~~) the books of the Corporation shall close or a record shall be taken for such stock dividend~~), ~~distribution or subscription rights or~~ (ii) ~~such reorganization, reclassification, consolidation, merger, sale~~ or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the ~~Corporation or any~~ definition of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value Deemed Liquidation (as such term is defined in ~~Article IX) per share of Common Stock (as determined in good faith by~~ the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffArticles). (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Series B Preferred Share Purchase Agreement (Qualigen Therapeutics, Inc.), Master Agreement (Qualigen Therapeutics, Inc.)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (i) Each share of ~~Series B~~ Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock at the Conversion Ratio (subject ~~(x)~~ to ~~adjustment from time to time as provided below (as so adjusted, the "conversion ratio"~~reduction under Section 5(a)(ii) and (yiii), at the option of the holder in whole or in part at any time after the expiration of 45 days after the Original Issue Date (as defined in Section 7 below) (~~prior~~ the "Conversion Term"). Any conversion under this Section 5(a)(i) shall be of a minimum amount of at least 12,500 shares of Preferred Stock. The holder shall effect conversions by delivering to the ~~consummation~~ Company a written notice (the "Holder Conversion Notice"), accompanied by the certificate representing the shares of the ~~Recapitalization~~Preferred Stock to be converted. Each Holder Conversion Notice shall specify the number of shares of Preferred Stock to be converted and the date on which such conversion is to be effected (the "Holder Conversion Date"), which shall in no event be earlier than the date such Holder Conversion Notice is given in accordance with Section 5(k) below. Each Holder Conversion Notice, once given, shall be irrevocable (subject to ~~limitations resulting from~~ Section 5(c) below). If the ~~available~~ holder is converting less than all shares of Preferred Stock, the Company shall promptly deliver to the holder a certificate for such number of shares of Preferred Stock as have not been converted. (ii) If on the Conversion Date (as defined below) applicable to any conversion under Section 5(a) or 5(b), the Conversion Price (as defined below) then in effect is such that the aggregate number of shares of Common Stock that would then be issuable upon conversion of all then-outstanding shares of Preferred Stock, when combined with any shares of Common Stock previously issued upon conversion of any shares of Preferred Stock, would equal or exceed 1,070,000 shares (the "Issuable Maximum"), then the Company shall be obligated to effect the conversion of only such portion of each share of Preferred Stock subject to such conversion as is represented by the Conversion Percentage (as defined in the next sentence), and the remaining portion of such share shall be subject to the mandatory redemption provisions of Section 6. The "Conversion Percentage" shall be a fraction, the numerator of which ~~may~~ is the "Allowable Conversion Maximum" (as defined in the next sentence) and the denominator of which is the total number of shares of Preferred Stock outstanding prior to such conversion. The Allowable Conversion Maximum at any time shall be ~~reserved~~ the difference between the Issuable Maximum and the total number of shares of Common Stock previously issued upon conversion of shares of Preferred Stock. In the event of any stock split, stock dividend, recapitalization, reorganization or other similar action or event, appropriate adjustment shall be made to the Issuable Maximum and the Allowable Conversion Maximum. (iii) If on any Conversion Date for ~~issuance~~ any shares of Preferred Stock applicable to any conversion under Section 5(a) or 5(b), the Per Share Market Value of the Common Stock on the immediately preceding date exceeds $7.75, the number of shares issued upon conversion of such shares of Preferred Stock shall be reduced by a number of shares equal to 50% of (A) the amount by which such Per Share Market Value exceeds $7.75, divided by (B) such Per Share Market Value, times (C) the number of shares which would otherwise be issued upon such conversion, but for the reduction provided ~~,that any conversion pursuant to~~ for in this ~~paragraph A of less than all~~ Section 5(a)(iii). (b) Each share of the ~~outstanding shares of Series B~~ Preferred Stock shall be convertible into shares of Common Stock at the Conversion Ratio (subject to reduction under Section 5(a)(ii) and (iii) above), at the option of the Company in whole or in part at any time on or after the expiration of 120 days after the Original Issue Date. The Company shall effect such conversion by delivering to the holders of such shares of Preferred Stock to be converted a written notice (the "Company Conversion Notice"), which Company Conversion Notice, once given, shall be irrevocable; provided, however, that during the period of two years after the Original Issue Date, the Company shall have no right to deliver a Company Conversion Notice and effect the conversion of shares of Preferred Stock under this Section 5(b) unless either (i) all of such shares may be converted into shares of Common Stock in accordance with Section 5(a)(ii); or (ii) all of such shares may be either converted into shares of Common Stock in accordance with Section 5(a)(ii) or may be redeemed and the entire redemption price paid in full in accordance with Section 6 without violating the CGCL (as defined below in Section 6). Each Company Conversion Notice shall specify the number of shares of Preferred Stock to be converted and the date on which such conversion is to be effected (the "Company Conversion Date"). The Company shall give such Company Conversion Notice in accordance with Section 5(k) below at least two Trading Days before the Company Conversion Date. Any such conversion shall be effected on a pro rata basis ~~amongst all~~ among the holders of ~~Series B~~ Preferred Stock. ~~After consummation~~ Upon the conversion of ~~the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding~~ shares of ~~Series B~~ Preferred Stock ~~give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (~~pursuant to a ~~"Conversion Notice"). Following receipt of a~~ Company Conversion Notice, the holders of ~~Series B~~ the Preferred Stock shall surrender the ~~certificate or~~ certificates ~~therefor duly endorsed,~~ representing such shares at the office of the ~~Corporation~~ Company or of any transfer agent for the Preferred Stock or Common Stock. If the Company is converting less than all shares of the Preferred Stock, the Company shall, upon conversion of such ~~Series,~~ shares subject to such Company Conversion Notice and ~~shall state therein the name or names in which~~ receipt of the certificate or certificates ~~for~~ representing such shares of ~~Common Stock are to be issued. The Corporation shall~~Preferred Stock, ~~as soon as practicable thereafter, issue and~~ deliver ~~at such office to such holder, or~~ to the ~~nominee~~ holder or ~~nominees~~ holders a certificate for such number of ~~such holder~~shares of Preferred Stock as have not been converted. Each of a Holder Conversion Notice and a Company Conversion Notice is sometimes referred to herein as a "Conversion Notice," and each of a "Holder Conversion Date" and a "Company Conversion Date" is sometimes referred to herein as a "Conversion Date." (c) Three Trading Days after the Conversion Date, the Company will deliver to the holder (i) a certificate or certificates ~~for~~ which shall be free of restrictive legends and trading restrictions (other than those then required by law), representing the number of shares of Common Stock being acquired upon the conversion of shares of Preferred Stock (subject to ~~which such holder~~ any reduction required pursuant to Section 5(a)(ii) or (iii)), and (ii) subject to Section 6 below, the certificate representing the number of shares of Preferred Stock not converted; provided, however that the Company shall not be ~~entitled as aforesaid. Such conversion shall be deemed~~ obligated to ~~have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive~~ issue certificates evidencing the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of ~~Series B~~ Preferred Stock (or with respect to shares subject to redemption pursuant to Sections 5(a)(ii) and 6, to pay the ~~number of~~ redemption price payable under Section 6), until certificates evidencing such shares of Preferred Stock are either delivered to the Company or any transfer agent for the Preferred Stock or Common ~~Stock~~ Stock, or the holder notifies the Company that such certificates have been lost, stolen or destroyed and provides a bond (or other adequate security acceptable to the Company) satisfactory to the Company to indemnify the Company from any loss incurred by it in connection therewith. The Company shall, upon request of the holder, use its best efforts to deliver any certificate or certificates required to be ~~issued~~ delivered by the Company under this Section 5(c) electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. In the case of a conversion pursuant to a Holder Conversion Notice, if such certificate or certificates are not delivered by the date required under this Section 5(c), the holder shall be ~~rounded down~~ entitled by written notice to the ~~nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case~~ Company at any time on or ~~from time~~ before such holder's receipt of such certificate or certificates thereafter, to ~~time~~ rescind such conversion, in which event the ~~Corporation~~ Company shall ~~pay any dividend or make any other distribution to~~ immediately return the ~~holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to~~ certificates representing the ~~holders of its Common Stock or other class of securities any additional~~ shares of ~~stock of~~ Preferred Stock tendered for conversion. (i) The Conversion Price (the "Conversion Price") in effect on any ~~class or any other right, or there~~ Conversion Date shall be the lesser of the Closing Price on the Trading Day immediately preceding the Original Issue Date or 82.5% of the average of the Closing Price on the three Trading Days immediately preceding the Conversion Date. For purposes of this Section, the "Closing Price" on any ~~capital reorganization or reclassification~~ Trading Day shall mean the last reported closing price of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of Company on such ~~notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown~~ day on the ~~books of the Corporation maintained by the Transfer Agent thereof of the date~~ principal securities exchange on which ~~(i)~~ the ~~books of~~ Common Stock is listed or, if the ~~Corporation shall close or a record shall be taken for such stock dividend~~Common Stock is not so listed, ~~distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as~~ the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders last reported bid price of the Common Stock ~~of record shall participate in said dividend~~as reported on The Nasdaq National Market on such date or, ~~distribution or subscription rights or shall be entitled to exchange their~~ if the Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action is neither so ~~taken. E. From and after the Recapitalization~~listed nor so reported, the ~~Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion~~ last reported bid price of the ~~shares of Series B Preferred Stock, such number of its shares of~~ Common Stock as ~~shall from time to time be sufficient to effect~~ quoted by a registered broker-dealer for which such quotes are available on such date. (ii) If the ~~conversion of all outstanding shares of Series B Preferred Stock~~Company, ~~and if~~ at any time ~~the number of authorized but unissued~~ while any shares of ~~Common~~ Preferred Stock are outstanding, (a) shall ~~not be sufficient to effect the conversion of all then outstanding~~ pay a stock dividend or otherwise make a distribution or distributions on shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its ~~counsel, be necessary to increase its authorized but unissued shares of Common~~ Junior Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock payable in shares of its capital stock (whether payable in shares of its Common ~~Stock~~Stock or of capital stock of any class), (Bb) subdivide ~~the~~ outstanding shares of Common Stock into a larger number of ~~shares of Common Stock~~shares, (Cc) combine ~~the~~ outstanding shares of Common Stock into a smaller number of ~~shares~~ shares, or (Dd) issue by reclassification of ~~the~~ shares of Common Stock any shares of capital stock of the ~~Corporation, then, and in each such case~~Company, the ~~conversion ratio~~ Conversion Price designated in ~~effect immediately prior to such event or the record date therefor, whichever is earlier,~~ Section 5(d)(i) shall be ~~adjusted so that~~ multiplied by a fraction of which the ~~holder of any shares of Series B Preferred Stock thereafter surrendered for conversion~~ numerator shall be ~~entitled to receive~~ the number of shares of Common Stock ~~or other securities~~ of the ~~Corporation~~ Company outstanding before such event and of which ~~such holder would have owned or have been entitled to receive after~~ the ~~happening~~ denominator shall be the number of ~~any of the events described above, had such~~ shares of ~~Series B Preferred~~ Common Stock ~~been surrendered for conversion immediately prior to the happening of~~ outstanding after such ~~event or the record date therefor, whichever is earlier~~event. An Any adjustment made pursuant to this ~~clause (i~~Section 5(d)(ii) shall become effective ~~(x)~~ immediately after the record date in the case of ~~any such~~ a dividend or ~~distribution,~~ distribution and shall become effective immediately after the ~~close of business on the record~~ effective date ~~for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y)~~ in the case of ~~any such~~ a subdivision, ~~reclassification~~ combination or ~~combination, at the close of business on the day upon which such corporate action becomes effective~~re-classification. (iiiii) In ~~the~~ case the ~~Corporation shall~~Company, ~~after~~ at any time while any shares of the ~~Issue Date~~Preferred Stock are outstanding, shall issue rights or warrants to all holders of Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per ~~share, or securities convertible into or exchangeable for shares~~ share less than the Per Share Market Value of Common Stock ~~("Convertible Securities") having a "Conversion Price" (as defined~~ at the record date mentioned below~~) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case~~, the ~~conversion ratio~~ Conversion Price designated in Section 5(d)(i) shall be ~~adjusted so that~~ multiplied by a fraction, of which the ~~holder of each share of Series B Preferred Stock~~ denominator shall be ~~entitled to receive, upon the conversion thereof,~~ the number of shares of Common Stock ~~determined by multiplying~~ (Aexcluding treasury shares, if any) ~~the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock~~ outstanding on the date ~~on which~~ of issuance of such ~~shares~~ rights or ~~Convertible Securities are issued and (2)~~ warrants plus the number of additional shares of Common Stock ~~issued~~offered for subscription or purchase, ~~or into~~ and of which the ~~Convertible Securities may convert, and the denominator of which~~ numerator shall be ~~the sum of (x)~~ the number of shares of Common Stock (excluding treasury shares, if any) outstanding on the date of issuance of such ~~date and (y)~~ rights or warrants plus the number of shares ~~of Common Stock~~ which the aggregate ~~consideration receivable by the Corporation for~~ offering price of the total number of shares ~~of Common Stock~~ so ~~issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued,~~ offered would purchase at such ~~Current~~ Per Share Market ~~price on such date~~Value. An Such adjustment ~~made pursuant to this clause (ii)~~ shall be made ~~on the next Business Day following the date on which any~~ whenever such ~~issuance is made~~ rights or warrants are issued, and shall be become effective ~~retroactively~~ immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date ~~fixed~~ for the determination of stockholders entitled to receive such ~~dividend~~ rights or warrants. However, upon the expiration of any right or warrant to purchase Common Stock the issuance of which resulted in an adjustment in the Conversion Price designated in Section 5(d)(i) pursuant to this Section 5(d)(iii), if any such right or warrant shall expire and shall not have been exercised, the Conversion Price designated in Section 5(d)(i) shall immediately upon such expiration be recomputed and effective immediately upon such expiration be increased to the price which it would have been (but reflecting any other adjustments in the Conversion Price made pursuant to the provisions of this Section 5 after the issuance of such rights or warrants) had the adjustment of the Conversion Price made upon the issuance of such rights or warrants been made on the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of such rights or warrants actually exercised. (iv) In case the Company, at any time while shares of Preferred Stock are outstanding, shall distribute to all holders of Common Stock (and not to holders of Preferred Stock) evidences of its indebtedness or assets or rights or warrants, to subscribe for or purchase any security (excluding those referred to in Section 5(d)(iii) above) then in each such case the Conversion Price at which each share of the Preferred Stock shall thereafter be convertible shall be determined by multiplying the Conversion Price in effect prior to the record date fixed for determination of stockholders entitled to receive such distribution by ~~(2)~~ a ~~fraction, the numerator~~ fraction of which the denominator shall be the Per Share Market Value of Common Stock determined as of the record date mentioned above, and of which the numerator shall be such Per Share Market Value of the Common Stock on such record date less the then ~~Current Market Price per~~ fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined ~~in good faith~~ by the Board of Directors of the ~~Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution~~Company in good faith; provided, ~~however,~~ however that in the event of a distribution exceeding ten percent (10%) of the net assets of the Company, then such fair market value shall be determined by a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Company) (an "Appraiser") selected in good faith by the holders of a majority in interest of the shares of ~~capital stock of a Subsidiary~~ Preferred Stock; and provided, further that the Company, after receipt of the ~~Corporation (~~determination by such Appraiser shall have the right to select an additional Appraiser, in which case the fair market value shall be equal to the average of the determinations by each such Appraiser. In either case the adjustments shall be described in a ~~"Spin-Off") made~~ statement provided to all holders of ~~shares of Common Stock, the numerator of such fraction shall be the sum~~ Preferred Stock of the ~~Current Market Price per share~~ portion of ~~Common Stock for the period~~ assets or evidences of ~~20 Trading Days preceding the 35th Trading Day after the effective date of~~ indebtedness so distributed or such ~~Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of~~ subscription rights applicable to one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading DayStock. An Such adjustment ~~made pursuant to this clause (iii)~~ shall be made ~~upon the opening of business on the next Business Day following the date on which~~ whenever any such ~~dividend or~~ distribution is made and shall be become effective ~~retroactively~~ immediately after the ~~close of business on the~~ record date ~~fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment~~ mentioned above. (v) All calculations under this Section 6 shall be made ~~and be effective~~ to the nearest cent or the nearest 1/100th of a share, as ~~of such 35th Trading Day after~~ the ~~effective date of such Spin-Off~~case may be. (vi) Whenever the Conversion Price is adjusted pursuant to Section 5(d)(ii),(iii), (iv) ~~For purposes of this paragraph G~~or (v), the Company shall promptly mail to each holder of shares of Preferred Stock, a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. (vii) In case of any reclassification of the Common Stock, any consolidation or merger of the Company with or into another person, sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange pursuant to which share exchange the Common Stock is converted into other securities, cash or property, then the holders of the shares of Preferred Stock then outstanding shall have the right thereafter to convert such shares only into the kind and amount of shares of stock and other securities and property receivable upon or deemed to be held following such reclassification, consolidation, merger, sale, transfer or share exchange by a holder of a number of shares of the Common Stock at of the Company into which such shares Preferred Stock could have been converted immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. The terms of any ~~time outstanding~~ such consolidation, merger, sale, transfer or share exchange shall ~~not~~ include ~~any~~ such terms so as to continue to give to the holder of shares of ~~Common~~ Preferred Stock ~~then owned~~ the right to receive the securities or ~~held by~~ property set forth in this Section 5(d)(vii) upon any conversion following such consolidation, merger, sale, transfer or ~~for~~ share exchange. This provision shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. (viii) In case: (A) the ~~account of the Corporation.~~Company shall declare a

Appears in 2 contracts

Sources: Convertible Preferred Stock Purchase Agreement (Alpharel Inc /Ca/), Convertible Preferred Stock Purchase Agreement (Alpharel Inc /Ca/)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each share of this Series ~~B Preferred Stock shall~~ may be ~~convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock,~~ converted at any time, at the option of the holder thereof, in the manner hereinafter provided, into fully-paid and nonassessable Common Shares, provided, however, that on any redemption of any shares of this Series or any liquidation of the Corporation, the right of conversion shall terminate at the close of business on the full business day next preceding the date fixed for such redemption or for the payment of any amounts distributable on liquidation to the holders of the shares of this Series. The initial conversion rate for shares of this Series shall be one Common Share for each one share of this Series surrendered for conversion, representing an initial conversion price (for purposes of Section 7(g)) of U.S. $1.35 per share of the Corporation's Common Shares (hereinafter, the "Conversion Price"). The applicable conversion rate and Conversion Price from time to time in effect are subject to adjustment as hereinafter provided. (b) Whenever the Conversion Price shall be adjusted as provided in Section 7(g) hereof, the Corporation shall forthwith file at each office designated for the conversion of the shares of this Series, a statement, signed by any of the Chairman of the Board, the President, any Vice President or the Treasurer of the Corporation, showing in reasonable detail the facts requiring such adjustment. The Corporation shall also cause a notice setting forth any such adjustments to be sent by mail, first class, postage prepaid, to each record holder of shares of this Series at his or its address appearing on the stock register. If such notice relates to an adjustment resulting from an event referred to in paragraph 7(g)(vii), such notice shall be included as part of the notice required to be mailed and published under the provisions of paragraph 7(g)(vii) hereof. (c) The right of conversion shall be exercised by the holder by the surrender of the certificates representing shares of this Series to be converted to the Corporation at any time during normal business hours at the office or agency then maintained by it for the conversion of shares of this Series (the "Conversion Office"), accompanied by written notice to the Corporation of such holder's election to convert and, if so required by the Corporation or any conversion agent, by an instrument of transfer, in form satisfactory to the Corporation and to any conversion agent, duly executed by the registered holder or by such holder's duly authorized attorney, and transfer ~~agent~~ tax stamps or funds therefor, if required pursuant to Section 7(k). (d) As promptly as practicable after the surrender for ~~such Series, into~~ conversion of one ~~thousand (1,000) fully paid and nonassessable~~ or more certificates representing any shares of ~~Common Stock subject (x) to adjustment from time to time as~~ this Series in the manner provided ~~below (as so adjusted, the "conversion ratio"~~in Section 7(c) and ~~(y) (prior to~~ the ~~consummation~~ payment in cash of any amount required by the ~~Recapitalization) to limitations resulting from the available number~~ provisions of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A aboveSection 7(k), the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate will deliver or ~~certificates therefor duly endorsed,~~ cause to be delivered at the ~~office~~ Conversion Office to or upon the written order of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees holder of such ~~holder~~shares, a certificate or certificates ~~for~~ representing the number of ~~shares of~~ full Common ~~Stock to which~~ Shares issuable upon such conversion, issued in such name or names as such holder ~~shall be entitled as aforesaid~~may direct, subject to any applicable contractual restrictions and any restrictions imposed by applicable securities laws. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such ~~Conversion Notice~~ surrender of certificates representing shares of this Series in proper order for conversion, and all rights of the holder of such shares as a holder of such shares shall cease at such time, and the person or persons ~~entitled~~ in whose name or names the certificates for such Common Shares are to ~~receive the shares of Common Stock issuable upon such conversion~~ be issued shall be treated for all purposes as having become the ~~recordholder~~ record holder or holders of thereof at such ~~shares of Common Stock as of~~ time; provided, however, that any such ~~date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for~~ surrender on any ~~issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and~~ date when the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the transfer books of the Corporation shall ~~close~~ be closed shall constitute the person or ~~a record shall be taken~~ persons in whose name or names the certificates for such ~~stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place,~~ Common Shares are to be issued as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the record holder or holders ~~of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock~~ thereof for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect purposes immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business next succeeding day on ~~the day upon~~ which such ~~corporate action becomes effective~~stock transfer books are opened. (iie) In Upon conversion in the ~~case the Corporation shall, after the Issue Date, issue shares~~ manner provided in this Section 7 of ~~Common Stock at~~ only a ~~price per share, or securities convertible into or exchangeable for shares~~ portion of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of ~~Common Stock determined~~ this Series represented by ~~multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B)~~ a ~~fraction~~certificate so surrendered for conversion, the ~~numerator~~ Corporation shall issue and deliver or cause to be delivered at the Conversion Office to or upon the written order of ~~which shall be~~ the ~~sum~~ holder of ~~(1)~~ the certificate so surrendered for conversion, at the expense of the Corporation, a new certificate or certificates representing the number of shares of ~~Common Stock outstanding on~~ this Series representing the ~~date on which~~ unconverted portion of the certificate so surrendered, issued in such ~~shares~~ name or ~~Convertible Securities are issued~~ names as such holder may direct, subject to any applicable contractual restrictions and any restrictions imposed by applicable securities laws. (2f) ~~the number of additional~~ All shares of ~~Common Stock issued, or into which the Convertible Securities may convert, and the denominator of~~ this Series which shall ~~be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation~~ have been surrendered for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) conversion as herein provided shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall no longer be deemed to be outstanding and all rights with respect to such shares, including the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional considerationrights, if any, ~~payable~~ to receive notices and to vote, shall forthwith cease and terminate except only the right of the holder thereof to receive Common Shares in exchange therefor. Any shares of this Series so converted shall be retired and canceled and shall not be reissued, and the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or may from time to time ~~after~~ take such appropriate action as may be necessary to reduce the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of authorized shares of ~~Common Stock which are referred to in clause (i) of~~ this ~~paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of~~ Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offaccordingly. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Securities Purchase Agreement (Warburg Pincus Ventures Lp), Securities Purchase Agreement (Healthcare Capital Corp)

Conversion. ~~The holders of~~ (a) At the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred StockPayee’s option, at any ~~time, at the office~~ time prior to payment in full of the ~~Corporation~~ principal balance of this Note, the Payee may elect to convert all or any ~~transfer agent for such Series,~~ portion of this Note into ~~one thousand~~ that number of warrants (~~1,000~~the “Conversion Warrants”) ~~fully paid and nonassessable shares of Common Stock subject~~ equal to: (xi) ~~to adjustment from time to time as provided below (as so adjusted,~~ the ~~"conversion ratio") and (y) (prior to the consummation~~ portion of the ~~Recapitalization) to limitations resulting from~~ principal amount of the ~~available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion~~ Note being converted pursuant to this ~~paragraph A of less than all of~~ Section 14, divided by (ii) $0.50, rounded up to the ~~outstanding shares of Series B Preferred Stock~~ nearest whole number. Each Conversion Warrant shall be have the same terms and conditions as the warrants issued by the Maker pursuant to a private placement, as described in Maker’s Registration Statement on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock Form S-1 (~~a "Conversion Notice"~~333-198236). ~~Following receipt of a~~ The Conversion ~~Notice~~Warrants, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock underlying the Conversion Warrants and any other equity security of Maker issued or issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in with respect ~~of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down~~ to the ~~nearest whole share, and the holder~~ foregoing by way of ~~Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any~~ a stock dividend or ~~make any other distribution to the holders~~ stock split or in connection with a combination of ~~its Common Stock or other class of securities~~shares, ~~or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right~~recapitalization, ~~or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or~~ amalgamation, consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice reorganization (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend“Warrant Shares”), distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to ~~exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate~~ the registration rights set forth in ~~such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken~~Section 15 hereof. ~~E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the~~ (b) Upon any complete or partial conversion of the ~~shares~~ principal amount of ~~Series B Preferred Stock~~this Note, (i) such ~~number~~ principal amount shall be so converted and such converted portion of ~~its shares of Common Stock as~~ this Note shall ~~from time~~ become fully paid and satisfied, (ii) the Payee shall surrender and deliver this Note, duly endorsed, to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to Maker or such other ~~remedies~~ address which Maker shall designate against delivery of the Conversion Warrants, (iii) Maker shall promptly deliver a new duly executed Note to the Payee in the principal amount that remains outstanding, if any, after any such conversion and (iv) in exchange for all or any portion of the surrendered Note, Maker shall deliver to Payee the Conversion Warrants, which shall bear such legends as ~~shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may~~are required, in the opinion of ~~its counsel, be necessary~~ counsel to ~~increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required~~ Maker or by any other agreement between Maker and the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, Payee and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, applicable state and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other federal securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effectivelaws. (iic) ~~In the case the Corporation shall, after the Issue Date,~~ The Payee shall pay any and all issue ~~shares of Common Stock at a price per share,~~ and other taxes that may be payable with respect to any issue or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate delivery of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes Warrants upon conversion of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) Note pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distributionhereto; provided, however, that the Payee shall not be obligated to pay any transfer taxes resulting from any transfer requested by the Payee in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which connection with any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offconversion. (ivd) ~~For purposes~~ The Conversion Warrants shall not be issued upon conversion of this ~~paragraph G, the number~~ Note unless such issuance and such conversion comply with all applicable provisions of ~~shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation~~law.

Appears in 2 contracts

Sources: Expense Advancement Agreement (Hydra Industries Acquisition Corp.), Expense Advancement Agreement (Hydra Industries Acquisition Corp.)

Conversion. ~~The holders~~ (a) As of the Effective Time, by virtue of the Merger and without any additional action on the part of any holder of shares of the Seller's Series B Preferred ~~Stock shall have conversion rights as follows: A. Each~~ Stock, each share of Series B Preferred Stock ~~shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority~~ of the Seller issued and outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the ~~close of business~~ Effective Time (other than any Dissenters' Shares) and any accrued and unpaid dividends in respect thereof shall be converted into the right to receive its pro rata portion (based on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion number of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 daysincluding Dissenters' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock Shares which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of the Series B Preferred Stock Merger Consideration, payable upon surrender of the certificate representing such ~~dividend or distribution; provided~~shares to the Disbursing Agent as set forth in Section 2.6 hereof and as otherwise set forth herein. (b) As of the Effective Time, ~~however, that in~~ by virtue of the ~~event~~ Merger and without any additional action on the part of ~~a distribution~~ any holder of shares of ~~capital stock of a Subsidiary~~ the 15% Preferred Stock of the ~~Corporation~~ Seller, each share of 15% Preferred Stock of the Seller issued and outstanding immediately prior to the Effective Time (~~a "Spin-Off"~~other than any Dissenters' Shares) ~~made~~ and any accrued and unpaid dividends in respect thereof shall be converted into the right to ~~holders~~ receive its pro rata portion (based on the number of shares of 15% Preferred Stock including Dissenters' Shares which are shares of 15% Preferred Stock) of the 15% Preferred Stock Merger Consideration, payable upon surrender of the certificate representing such shares to the Disbursing Agent as set forth in Section 2.6 hereof and as otherwise set forth herein. (c) As of the Effective Time, by virtue of the Merger and without any additional action on the part of any holder of shares of 8% Preferred Stock of the Seller, each share of 8% Preferred Stock of the Seller issued and outstanding immediately prior to the Effective Time (other than any Dissenters' Shares) and any accrued and unpaid dividends in respect thereof shall be converted into the right to receive its pro rata portion (based on the number of shares of 8% Preferred Stock including Dissenters' Shares which are shares of 8% Preferred Stock) of the 8% Preferred Stock Merger Consideration, payable upon surrender of the certificate representing such shares to the Disbursing Agent as set forth in Section 2.6 hereof and as otherwise set forth herein. (d) As of the Effective Time, by virtue of the Merger and without any additional action on the part of any holder of shares of Common ~~Stock, the numerator of such fraction shall be the sum~~ Stock of the ~~Current Market Price per~~ Seller, each share of Common Stock ~~for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price~~ of the ~~number of shares~~ Seller issued and outstanding immediately prior to the Effective Time (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iiiother than any Dissenters' Shares) shall be ~~made upon~~ converted into the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled right to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. its pro rata portion (~~iv) For purposes of this paragraph G,~~ based on the number of shares of Common Stock ~~at any time outstanding shall not include any~~ including Dissenters' Shares which are shares of Common ~~Stock then owned or held by or for the account~~ Stock) of the Common Stock Merger Consideration, payable upon surrender of the certificate representing such shares to the Disbursing Agent as set forth in Section 2.6 hereof and as otherwise set forth herein. (e) As of the Effective Time, by virtue of the Merger and without any additional action on the part of any holder of shares of common stock of the Acquiror, each share of common stock of the Acquiror issued and outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. (f) Notwithstanding the foregoing, the amount of Series B Preferred Stock Merger Consideration, 15% Preferred Stock Merger Consideration, 8% Preferred Stock Merger Consideration or Common Stock Merger Consideration payable to any holder of Series B Preferred Stock, 15% Preferred Stock, 8% Preferred Stock or Common Stock, as the case may be, who has issued a promissory note to the Seller in consideration or partial consideration for his, her or its shares of such stock, shall be reduced by the principal of and interest on such note outstanding as of the Effective Time, all such notes shall be cancelled as of the Effective Time, and the Aggregate Merger Consideration payable by the Acquiror shall be reduced by the aggregate amount of the principal of and interest on such notes as provided in Section 2.2(c).

Appears in 2 contracts

Sources: Merger Agreement (Universal Outdoor Holdings Inc), Merger Agreement (Universal Outdoor Holdings Inc)

Conversion. ~~The holders~~ (a) In accordance with the provisions of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any timethis Section 5, at the ~~office~~ option of the ~~Corporation or any transfer agent for such Series~~Holder, the outstanding principal amount due hereunder shall be converted on the Maturity Date, in whole but not in part, into ~~one thousand~~ shares (~~1,000~~individually, a “Share” and collectively, the “Shares”) ~~fully paid and nonassessable shares~~ of the Company’s common stock, $0.001 par value per share (the “Common Stock”). The initial conversion price is $3.50 per share of the Common Stock ~~subject~~ (xthe “Conversion Price”). (b) No fractional Shares shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to ~~adjustment from time to time as provided below (as so adjusted~~the Holder upon conversion of this Note, the "Company shall pay the cash not converted in lieu of a fractional Share. To convert this Note pursuant to this Section 5, the Holder shall provide to the Company written notice of such conversion ~~ratio"~~at least ten (10) ~~and (y) (~~days prior to the ~~consummation of~~ Maturity Date, and surrender this Note on or before the ~~Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion~~Maturity Date, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the principal office of the ~~Corporation or of any transfer agent for such Series~~Holder. At its expense, ~~and shall state therein~~ the ~~name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation~~ Company shall, as soon as practicable thereafter, ~~issue and~~ deliver ~~at such office~~ to such ~~holder~~Holder at the address in the Company’s records for the Holder, or a Stock Certificate endorsed to the ~~nominee or nominees of such holder, a certificate or certificates for~~ Holder reflecting the number of ~~shares of Common Stock~~ Shares to which ~~such holder~~ the Holder shall be entitled ~~as aforesaid~~upon such conversion, together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note. Such certificate shall bear a legend in proper form, stating substantially as follows: “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.” In the event of any conversion of this Note pursuant to this Section 5, such conversion shall be deemed to have been made ~~immediately prior to the close of business~~ on the Maturity Date and on and after such date the Holder of ~~such Conversion Notice and the person or persons~~ this Note entitled to receive the ~~shares of Common Stock~~ Shares issuable upon such conversion shall be treated for all purposes as the ~~recordholder or holders~~ record holder of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuanceShares. ~~C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and~~ (c) In the ~~number of shares of Common Stock to be issued shall be rounded down to~~ event the ~~nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case~~ Company should at any time or from time to time after the ~~Corporation shall pay any~~ date of issuance hereof fix a record date for the effectuation of a split or subdivision of the then outstanding Common Stock, or a stock dividend or ~~make any other~~ distribution on the then outstanding Common Stock, then, as of such record date (or the date of such distribution, split or subdivision if no record date is fixed), the Conversion Price of this Note shall be appropriately decreased so that the number of Shares issuable upon conversion of this Note shall be increased in proportion to ~~the holders~~ such increase of ~~its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional~~ outstanding shares of ~~stock~~ Common Stock. (d) If the number of ~~any class or any other right, or there shall be any capital reorganization or reclassification~~ shares of the Common Stock outstanding at any time after the date hereof is decreased by a combination of the ~~Corporation or~~ outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for this Note shall be appropriately increased so that the number of shares of the Common Stock issuable on conversion hereof shall be decreased in proportion to such decrease in outstanding shares of the Common Stock. (e) In case of any consolidation of the Company with, or merger of the ~~Corporation with or into another~~ Company into, any other corporation, or in case of any sale or conveyance ~~to another corporation~~ of all or substantially all of the ~~property~~ assets of the ~~Corporation~~ Company, then as ~~an entirety or substantially as an entirety, or there shall be~~ a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing condition of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, ~~merger,~~ merger or sale or conveyance, ~~dissolution~~adequate provision will be made whereby the Holder will have the right to acquire and receive upon conversion of this Note in lieu of the Shares immediately theretofore acquirable upon the conversion of this Note, ~~liquidation~~ such shares of stock, securities, cash or ~~winding up shall take place,~~ assets as may be issued or payable with respect to or in exchange for the ~~case may be, provided that in the case~~ number of ~~any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders~~ shares of the Common Stock immediately theretofore acquirable and receivable upon conversion of ~~record shall participate~~ this Note had such consolidation, merger or sale or conveyance not taken place. The Company will not effect any consolidation, merger or sale or conveyance unless prior to the consummation thereof, the successor corporation (if other than the Company) assumes by written instrument the obligations under this Note and the obligations to deliver to the Holder such shares of stock, securities or assets as, in ~~said dividend~~accordance with the foregoing provisions, ~~distribution or subscription rights or shall~~ the Holder may be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so takenacquire. ~~E. From and after the Recapitalization, the Corporation~~ (f) The Company shall at all times reserve and keep available out of its authorized but unissued shares of its Common ~~Stock,~~ Stock solely for the purpose of effecting the conversion of ~~the shares of Series B Preferred Stock,~~ this Note such number of ~~its~~ shares ~~of Common Stock~~ as shall from time to time be sufficient to effect the conversion of ~~all outstanding shares of Series B Preferred Stock,~~ this Note; and if at any time the number of authorized but unissued shares of its Common Stock shall not be sufficient to effect the conversion of ~~all then~~ the entire outstanding ~~shares~~ principal amount of ~~Series B Preferred Stock~~this Note, ~~then~~ in addition to such other remedies as shall be ~~availableto~~ available to the ~~holder of Series B Preferred Stock~~Holder, the ~~Corporation~~ Company will use its commercially reasonable efforts to take such ~~corporate~~ Company action as may, in the opinion of ~~its~~ the Company’s counsel, be necessary to increase its authorized but unissued ~~shares of~~ Common Stock to such number of shares of Common Stock as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The (g) Until conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this ~~clause (ii),~~ Note the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which Holder shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed any rights as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a ~~dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities~~ stockholder of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffCompany. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Reseller Agreement (Ditech Networks Inc), Reseller Agreement (Ditech Networks Inc)

Conversion. ~~The holders~~ (a) At any time on or prior to the Maturity Date, (i) without Shareholder Approval, the Agent shall have the right to convert (any such conversion, a “Conversion”) any portion of the ~~Series B Preferred Stock shall have~~ principal and accrued interest of the Term Loans into shares of common stock, no par value of Parent (“Parent Common Stock”) that represent, in the aggregate in the event of more than one conversion ~~rights as follows: A. Each share~~ election pursuant to this clause (i), a number of ~~Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority~~ shares not exceeding 19.90% of the outstanding shares of ~~Series B Preferred Stock, at any time, at the office~~ Parent Common Stock as of the ~~Corporation or~~ date hereof and equaling the total amount of principal and accrued interest of the Term Loans being Converted divided by the Conversion Price upon Agent’s delivery of notice of its intent to effectuate such Conversion (any ~~transfer agent for~~ such ~~Series~~notice, ~~into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio"~~a “Conversion Notice”) and (yii) ~~(prior~~ with Shareholder Approval, the Agent shall have the right to ~~the consummation~~ Convert any portion of the ~~Recapitalization) to limitations resulting from~~ principal and accrued interest of the ~~available number of~~ Term Loans into shares of Parent Common Stock ~~which may be reserved for issuance upon such conversion, provided ,that~~ in any ~~conversion pursuant to this paragraph A~~ amount and equaling the total amount of ~~less than all~~ principal and accrued interest of the ~~outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of~~ Term Loans being Converted divided by the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion ~~Notice"). Following receipt~~ Price upon Agent’s delivery of a Conversion Notice. Notwithstanding anything herein to the contrary, if any ABL Obligations are outstanding at the time of such Conversion, the ~~holders~~ amount of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Parent Common Stock ~~are to be issued~~held by the Agent shall not exceed the Conversion Cap. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Any Conversion ~~Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion~~ shall be treated ~~for all purposes~~ as a prepayment of Term Loans hereunder and the ~~recordholder or holders~~ outstanding balance of ~~such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock~~ the Term Loans shall be ~~made without charge for~~ reduced by the amount so repaid upon such Conversion. Upon receipt of Agent’s Conversion Notice, the Borrowers shall cause the Conversion as promptly as possible and shall use commercially reasonable efforts to promptly (and in any ~~issue~~event within sixty (60) days of the applicable Conversion Notice) obtain any Shareholder Approval required to effectuate a Conversion pursuant to clause (ii) hereof. (b) All costs and expenses (including filing fees) with respect to filings under any applicable antitrust laws shall be borne by Parent. Parent shall pay any documentary, stamp or ~~other~~ similar issue or transfer tax ~~in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and~~ due on the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification issue of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there Conversion Shares. Parent shall ~~be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation~~ reserve (and shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available and free from preemptive rights) and shall continue to reserve out of its authorized but unissued ~~shares of~~ Parent Common ~~Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such~~ Stock a sufficient number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Parent Common Stock to ~~such number~~ permit the issuance of ~~shares as shall be sufficient for such purposes~~the Conversion Shares in full. ~~F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock~~ (c) Parent shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) ~~In case~~ issue the ~~Corporation shall at any time or from time~~ Conversion Shares to ~~time after~~ the ~~Issue~~ Lenders on a pro rata basis based on each Lender’s portion of the outstanding amount of the Term Loans on the Conversion Date (Aalong with any share certificates with respect thereto) ~~pay a dividend or make a distribution~~in accordance with the applicable Note with respect thereto and on terms substantially consistent with the Subscription Agreement and such Conversion Shares shall, ~~on the outstanding shares of Common Stock in shares of Common Stock~~upon issuance, ~~(B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock~~be duly authorized, ~~(C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock~~ validly issued, fully paid and nonassessable, not subject to any ~~shares of capital stock of the Corporation~~preemptive rights, ~~then~~and, be free from all taxes, Liens, security interests, charges, and other encumbrances with respect to the issuance thereof, other than taxes in ~~each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder~~ respect of any ~~shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock~~ transfer occurring contemporaneously with such issue and those under applicable federal, state or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. laws and (ii) In provide customary representations and warranties to the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation Lenders in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to ~~a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment~~ and in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that form set forth in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffSubscription Agreement. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Term Loan Credit Agreement (Beyond, Inc.), Term Loan Credit Agreement (Beyond, Inc.)

Conversion. ~~The holders~~ (A) Each holder of the Series B A Convertible Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, may at any time, at subject to the ~~office~~ provisions of paragraphs (B) and (C) below, upon surrender of the ~~Corporation~~ certificates therefor, convert all or any ~~transfer agent for such Series,~~ portion of his or its Series A Convertible Preferred Stock into ~~one thousand (1,000)~~ fully paid and nonassessable ~~shares of~~ Common Stock ~~subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation~~ of the ~~Recapitalization~~Corporation at the Conversion Ratio set forth below, plus declared and unpaid dividends thereon. (B) ~~to limitations resulting from~~ The holders acknowledge that at the ~~available~~ time of issuance of the Series A Convertible Preferred Stock the Corporation does not have a sufficient number of shares of Common Stock ~~which may be reserved~~ authorized and available for issuance ~~upon such conversion, provided ,that any~~ to effect the conversion ~~pursuant to this paragraph A of less than all~~ of the ~~outstanding~~ shares of the Series ~~B Preferred Stock shall be on a pro rata basis amongst all holders of Series B~~ A Convertible Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsedIf, at the ~~office of the Corporation or of~~ time any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B A Convertible Preferred Stock ~~shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon~~ requests a conversion of any shares of Series B A Convertible Preferred Stock in compliance with this Section 5 and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be does not have available a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient ~~to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the~~ number of authorized but unissued shares of Common Stock ~~shall not be sufficient~~ to effect ~~the conversion of all then outstanding shares of Series B Preferred Stock~~such conversion, ~~then in addition to such other remedies~~ as ~~shall be availableto the holder of Series B Preferred Stock~~soon as practicable thereafter, the Corporation will issue such number of shares of Common Stock as are available for issuance, and take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Corporation’s Amended and Restated Certificate of Incorporation. ~~F. Any notice required by the provisions~~ (C) Before any holder of ~~paragraph D to be given the holders of shares of Series B~~ Convertible Preferred Stock shall be ~~deemed given if sent~~ entitled to convert the same into full shares of Common Stock, such holder shall surrender the certificate or certificates therefor, endorsed or accompanied by ~~facsimile transmission~~written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by ~~telex,~~ the registered holder or ~~if deposited in the United States mail, postage prepaid, and addressed to each holder of record at~~ by his, her or its ~~address appearing on~~ attorney duly authorized in writing, at the ~~books~~ office of the ~~Corporation. G. The conversion ratio~~ Corporation or of any transfer agent for the Series A Convertible Preferred Stock, and shall ~~be subject~~ give written notice to ~~adjustment from time to time as follows: (i) In case~~ the Corporation at its office that the holder elects to convert the same and shall ~~at any time~~ state therein the holder’s name or ~~from time to time after~~ the ~~Issue Date (A) pay a dividend~~ names of the nominees in which the holder wishes the certificate or ~~make a distribution, on the outstanding~~ certificates for shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such caseto be issued. As soon as practicable thereafter, the ~~conversion ratio in effect immediately prior~~ Corporation shall issue and deliver at its office to ~~such event or the record date therefor, whichever is earlier, shall be adjusted so that~~ the holder of ~~any shares of~~ the Series B A Convertible Preferred ~~Stock thereafter surrendered~~ Stock, or to the holders nominee or nominees, a certificate or certificates for ~~conversion shall be entitled to receive~~ the number of shares of Common Stock ~~or other securities~~ to which the holder shall be entitled as aforesaid, together with cash in lieu of ~~the Corporation which such holder would have owned or~~ any fraction of a share. A conversion shall be deemed to have been ~~entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion~~ made immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the ~~record~~ date ~~for~~ of the ~~determination~~ surrender of ~~holders~~ the shares of Series A Convertible Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock ~~entitled to receive such dividend~~ issuable upon conversion shall be treated for all purposes as the record holder or ~~distribution, or (y) in~~ holders of the ~~case~~ shares of ~~any such subdivision, reclassification or combination,~~ Common Stock at the close of business on ~~the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall~~that date. From and after that date, ~~after the Issue Date, issue shares~~ all rights of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder ~~of each share of~~ with respect to the Series B A Convertible Preferred Stock so converted shall ~~be entitled~~ terminate, except only the right of the holder to ~~receive, upon the conversion thereof,~~ receive certificates for the number of shares of Common Stock ~~determined by multiplying (A) the applicable~~ issuable-upon conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued thereof and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation cash for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued fractional shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Subscription Agreement (Via Net Works Inc), Subscription Agreement (Mawlaw 660, LTD)

Conversion. The ~~holders~~ mode of carrying the ~~Series B Preferred Stock shall have conversion rights~~ Merger into effect and the manner and basis of converting the shares of ▇▇▇▇▇▇▇ into shares of IS4B are as follows: ~~A. Each share~~ 9.1. The aggregate number of ~~Series B~~ shares of ▇▇▇▇▇▇▇ Common Stock issued and outstanding on the Merger Date shall, by virtue of the Merger and without any action on the part of the holders thereof, be converted into an aggregate of 100,000 shares of IS4B Common Stock (the "IS4B shares") adjusted by any increase for fractional shares and reduced by any Dissenting Shares (defined below). The IS4B Common Stock to be issued hereunder ("the IS4B Shares") will be issued pursuant to Section 4(2) of the Securities Act of 1933 and/or Rule 506 of the General Rules and Regulations of the Securities and Exchange Commission, will be restricted as to transferability pursuant to Rule 144 thereof, and will bear substantially the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF IS4B." IS4B agrees to register the re-offer and resale by the holders of the IS4B Shares pursuant to a registration statement filed by IS4B with the Securities and Exchange Commission in connection with any offering of the IS4B Common Stock (excluding registration statements filed on Forms S-4 or S-8) 9.2. Upon completion of the Merger, there shall be 14,512,071 shares of IS4B Common Stock issued and outstanding, subject to such adjustments, held as follows: 100,000 common shares held by the former shareholders of ▇▇▇▇▇▇▇ and 14,412,071 common shares held by the other shareholders of IS4B. 9.3. All outstanding Common or Preferred Stock of ▇▇▇▇▇▇▇ and all warrants, options or other rights to its Common or Preferred Stock shall be ~~convertible at the direction of,~~ retired and ~~by notice to the Corporation from, the holders of a majority~~ canceled as of the ~~outstanding~~ Merger Date. 9.4. Each share of ▇▇▇▇▇▇▇ Common Stock that is owned by ▇▇▇▇▇▇▇ as treasury stock shall, by virtue of the Merger and without any action on the part of ▇▇▇▇▇▇▇, be retired and canceled as of the Merger Date. 9.5. Each certificate evidencing ownership of shares of ~~Series B Preferred Stock, at any time, at~~ IS4B Common Stock issued and outstanding on the ~~office~~ Merger Date or held by IS4B in its treasury shall continue to evidence ownership of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available same number of shares of IS4B Common ~~Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred~~ Stock. 9.6. IS4B Common Stock shall be issued to the holders of ▇▇▇▇▇▇▇ Common Stock in exchange for their shares on a pro rata basis ~~amongst all holders of Series B Preferred Stock. After consummation~~ in accordance with each holder's relative ownership of the ~~Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G.~~▇▇▇▇▇▇▇ Common Stock that is being exchanged. ~~B. If the holders of a majority of the outstanding~~ 9.7. The shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of IS4B Common Stock to be issued in exchange for ▇▇▇▇▇▇▇ Common Stock hereunder shall be ~~rounded down~~ proportionately reduced by any shares owned by ▇▇▇▇▇▇▇ shareholders who shall have timely objected to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice Merger (the ~~time of mailing of such notice shall be deemed to be the time of giving thereof~~"Dissenting Shares") to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by accordance with the provisions of ~~paragraph D to be given~~ the ~~holders~~ General Corporation Law of ~~shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission~~Delaware, ~~by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation~~as provided therein. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Merger Agreement (Chauvin Enterprises Inc), Merger Agreement (Internet Solutions for Business Inc)

Conversion. ~~The holders of~~ (a) If the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders~~ closing of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (Qualified Listing occurs prior to the ~~consummation of~~ Maturity Date, upon such Qualified Listing closing, this Note shall be mandatorily and automatically converted into Class A Ordinary Shares (the ~~Recapitalization) to limitations resulting from the available~~ “Automatic Conversion”). The number of ~~shares of Common Stock which may~~ Class A Ordinary Shares to be ~~reserved for issuance~~ issued to the Holder upon ~~such conversion, provided ,that~~ any ~~conversion pursuant to this paragraph A of less than all of~~ Automatic Conversion shall be determined by dividing the outstanding ~~shares~~ principal amount of ~~Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of~~ this Note by the ~~Recapitalization, the number "1,000" in this paragraph shall be "1"~~applicable Conversion Price, subject to ~~adjustment~~ adjustments as ~~provided~~ set forth in ~~paragraph VIII.G. B. If~~ Section 9(c). This Note shall be converted into Conversion Shares on the ~~holders of a majority~~ second (2nd) Business Day immediately following the closing date of the ~~outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above~~Qualified Listing (the “Conversion Date”). (b) On the Conversion Date, the ~~Corporation~~ Company shall ~~notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice~~pay or deliver, or cause the payment or delivery of, the ~~holders~~ relevant number of ~~Series B Preferred Stock~~ Conversion Shares, and any other securities, property or cash (including any cash payable in lieu of fractional shares pursuant to Section 9(c)) that may be deliverable or payable upon the conversion of this Note plus accrued and unpaid Interest with respect to the applicable principal amount, if any, to (but excluding) the Conversion Date, to the Holder and shall ~~surrender~~ (i) simultaneously upon the ~~certificate or certificates therefor duly endorsed, at~~ issue of such Conversion Shares instruct the ~~office~~ Company’s share registry to enter the Holder in the register of members of the ~~Corporation~~ Company as the holder of those Conversion Shares, or ~~of any transfer agent~~ (ii) if the Conversion Shares are eligible for book-entry settlement through a depositary, deliver such ~~Series, and shall state therein~~ Conversion Shares to the ~~name or names~~ Holder in ~~which the certificate or certificates for shares of Common Stock are to be issued~~compliance with such depositary’s procedures. The ~~Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or~~ delivery of the Conversion Shares to the ~~nominee or nominees of such holder, a certificate or certificates for~~ Holder in the ~~number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall~~ manner contemplated above will be deemed to ~~have been made immediately prior~~ satisfy the obligation of the Company to pay the ~~close~~ principal amount of ~~business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion~~ this Note so converted. The Holder shall be treated for all purposes as the ~~recordholder or holders~~ record holder of such ~~shares~~ Conversion Shares on the Conversion Date, and from and after such conversion, this Note shall cease to be outstanding for any purpose whatsoever. (c) Fractions of ~~Common Stock as of such date. The issuance of certificates or shares of Common Stock upon~~ Conversion Shares shall not be issued on any conversion of ~~shares~~ this Note. In lieu of ~~Series B Preferred Stock~~ any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted principal amount of this Note that would otherwise be converted into such fractional share on the Conversion Date in accordance with Section 6. (d) Any issuance and delivery of Conversion Shares upon any conversion of this Note shall be made without charge to the Holder for any ~~issue~~transfer, stamp or ~~other~~ similar tax or for any other governmental charges that may be imposed in ~~respect~~ connection with the issuance of such ~~issuance. C. No fractional shares~~ Conversion Shares, provided, however, that the Company shall not be ~~issued~~ required to pay any tax or such other charges that may be payable in connection with any transfer involved in the issuance of any Conversion Shares or other securities to a person other than the Holder upon conversion of ~~any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share~~this Holder, and the ~~holder~~ Company shall not be required to issue or deliver such Conversion Shares or other securities unless and until the person or persons requesting the issuance thereof shall have paid to the Company the amount of ~~Series B Preferred Stock~~ such tax or shall be have established to the satisfaction of the Company that such tax has been paid ~~in cash for any fractional share~~or is not payable. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation (e) So long as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalizationthis Note remains outstanding, the ~~Corporation~~ Company shall ~~at all times~~ reserve ~~and keep available~~ out of its authorized but unissued ~~shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock~~share capital, such number of ~~its shares~~ Class A Ordinary Shares as would be required to be delivered on conversion of ~~Common Stock as~~ the outstanding principal amount of this Note and shall ~~from time to time be sufficient to effect~~ ensure that all Conversion Shares delivered on the conversion of this Note will vest in the Holder full legal and valid title to and full beneficial ownership of such Class A Ordinary Shares, free and clear of all ~~outstanding shares of Series B Preferred Stock~~Encumbrances other than those created by the Holder or as set out in the Shareholders Agreement and the Articles, and ~~if at any time~~ rank pari passu and carry the ~~number of authorized but unissued shares of Common Stock shall not be sufficient~~ same rights and privileges in all other Class A Ordinary Shares issued (including the right to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, dividends and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third partiesdistributions), and ~~the "~~such Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions Shares will be duly and ~~expenses payable to third parties) plus the minimum aggregate amount of additional consideration~~validly issued and allotted, ~~if any~~fully paid and nonassessable, ~~payable~~ subject to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification ofrestrictions on transfer under this Note, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock Securityholders Agreement and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionArticles. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Securities Exchange Agreement (Lufax Holding LTD), Securities Exchange Agreement (Lufax Holding LTD)

Conversion. ~~The holders~~ (a) Except as set forth in Section 3.16(a) of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall~~ Loan Agreement, this Note may be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, converted into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available that number of shares of Common Stock ~~which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant~~ (rounded down to the nearest whole share) determined by dividing the Principal Amount (excluding interest) of this ~~paragraph A of less than all of~~ Note by $0.15 (the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1"“Conversion Price”), subject to adjustment ~~as provided in paragraph VIII.G. B. If~~ below, at any time upon the ~~holders of a majority~~ election of the ~~outstanding shares~~ Holder hereof as described in and subject to the conditions set forth in Section 1(c) of ~~Series B Preferred Stock give notice~~ the Schedule to the Loan Agreement (the “Holder Conversion”) and upon the election of ~~conversion under paragraph A above~~Maker as described in and subject to the conditions set forth in Section 1(e) of the Schedule to the Loan Agreement (the “Holder Conversion”), all in accordance with and subject to the ~~Corporation shall notify all other record holders~~ terms and conditions of ~~Series B Preferred Stock~~ the Loan Agreement (each a "“Conversion ~~Notice"~~Event”)~~. Following receipt~~ . (b) As soon as practicable after the occurrence of a Conversion ~~Notice~~Event, and in any event within the ~~holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office~~ time periods specified in Section 1(c) of the ~~Corporation or of any transfer agent for such Series~~Schedule to the Loan Agreement, ~~and shall state therein~~ Maker at its expense will cause to be issued in the name ~~or names in which the certificate or certificates for shares~~ of ~~Common Stock are~~ and delivered to ~~be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder~~Holder, a certificate or certificates for the number of shares of ~~Common~~ Conversion Stock to which ~~such holder~~ Holder shall be entitled ~~as aforesaid~~on such conversion. ~~Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such~~ No fractional Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be ~~made without charge for any issue~~issued on conversion of this Note. If on conversion of this Note a fraction of a share of Conversion Stock results, ~~stamp or other similar tax~~ Maker will pay the cash value of that fractional share based on the Conversion Price then in ~~respect of such issuance~~effect. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (~~the time of mailing of such notice shall be deemed to be the time of giving thereof~~c) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the ~~Recapitalization~~occurrence of a Conversion Event, ~~the Corporation~~ Maker shall ~~at all times~~ reserve and keep available out of its authorized but unissued ~~shares of~~ Common ~~Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock,~~ Stock such number of ~~its~~ shares of Common Stock as shall from time to time be sufficient to effect ~~the~~ conversion of this Note and all ~~outstanding shares of Series B Preferred Stock~~other Notes. Maker will not, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion by amendment of its ~~counsel~~Certificate of Incorporation or through any reorganization, ~~be necessary to increase its authorized but unissued shares~~ recapitalization, transfer of ~~Common Stock to such number~~ assets, consolidation, merger, dissolution, issue or sale of ~~shares as shall be sufficient for such purposes. F. Any notice required by the provisions~~ securities, dividend or other distribution of ~~paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex~~cash or property, or ~~if deposited in~~ any other voluntary action, avoid or seek to avoid the ~~United States mail, postage prepaid, and addressed to each holder of record at his, her~~ observance or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening performance of any of the ~~events described above~~terms to be observed or performed hereunder by Maker, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) but will at all times in good faith assist in the ~~case~~ carrying out of ~~any such dividend or distribution, immediately after~~ all the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), thenprovisions hereof, and in ~~each~~ the taking of all such ~~case,~~ action as may be necessary or appropriate in order to protect the conversion ~~ratio shall be adjusted so that the holder~~ rights of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation Holder as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionset forth herein against impairment. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Loan and Security Agreement (Healthcare Corp of America), Loan and Security Agreement (Healthcare Corp of America)

Conversion. ~~The holders~~ (a) Prior to or upon Maturity at the discretion of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ Holder, the unpaid principal amount of ~~Series B Preferred Stock~~ this Note plus all accrued interest thereon shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject~~ at $0.005 per share (x) the “Conversion Price”), at the option of the Holder, in whole or in part. Shares issued upon conversion shall become free trading stock as promulgated by the rules and regulations of the U. S. Securities and Exchange Commission. The date on which such conversion is to ~~adjustment from time~~ be effected (the “Conversion Date”). The Holder shall effect conversions by surrendering the Note to ~~time~~ be converted to the Company, together with the form of notice attached hereto as ~~provided below~~ Exhibit A (~~as so adjusted~~“Notice of Conversion”). The Notice of Conversion shall specify the amount of principal and accrued interest to be converted. The Notice of Conversion, once given, shall be irrevocable. If, at Maturity, the ~~"conversion ratio")~~ Holder is converting less than all of the principal and ~~(y) (prior~~ interest amounts represented by this Note, the Company shall deliver to the ~~consummation~~ Holder a cash payment equal to the amount of principal and interest, which is not converted at Maturity. Upon conversion in full of the ~~Recapitalization)~~ Note or upon payment in full on or before the Maturity Date, the Purchaser shall return the Note to ~~limitations resulting~~ the Company for cancellation. Upon maturity of this Note, the debt owed by the Company is considered to comply with the Securities Act of 1933 and Holder, upon conversion, can seek and render a legal opinion from qualified legal counsel to have the restrictions lifted from the ~~available~~ security. (b) The Company shall use reasonable efforts to deliver to the Holder not later than ten (10) Business Days after the Conversion Date, (i) a certificate or certificates representing the number of shares of Common Stock ~~which may~~ being acquired upon the conversion of this Note, and once this Note so converted in part shall have been surrendered to the Company, the Company shall deliver to the Holder a Note in the principal amount, if any, of this Note not then converted; provided, however, that the Company shall not be ~~reserved for issuance upon such conversion, provided ,that any conversion pursuant~~ obligated to ~~this paragraph A of less than all of~~ issue certificates evidencing the ~~outstanding~~ shares of ~~Series B Preferred~~ Common Stock issuable upon conversion of this Note until this Note is either delivered for conversion to the Company or the Holder notifies the Company that this Note has been lost, stolen or destroyed and provides an affidavit of loss and an agreement reasonably acceptable to the Company indemnifying the Company from any loss incurred by it in connection with such loss, theft or destruction. (c) No fractional shares of Common Stock shall be on issuable upon a ~~pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization,~~ conversion hereunder and the number ~~"1,000" in this paragraph~~ of shares to be issued shall be ~~"1", subject~~ rounded up or down to ~~adjustment as provided in paragraph VIII.G.~~the nearest whole share. ~~B. If the holders~~ (d) The issuance of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of ~~shares of Series B Preferred Stock~~ this Note shall be made without charge to the Holder for any ~~issue,~~ documentary stamp or ~~other~~ similar ~~tax~~ taxes that may be payable in respect of ~~such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and~~ the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time issuance or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing delivery of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may becertificate, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock Company shall not be ~~sufficient~~ required to ~~effect the conversion~~ pay any tax that may be payable in respect of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, any transfer involved in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, issuance and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case delivery of any such ~~dividend~~ certificate upon conversion in a name other than that of the Holder and the Company shall not be required to issue or ~~distribution, immediately after~~ deliver such certificates unless or until the ~~close~~ person or persons requesting the issuance thereof shall have paid to the Company the amount of ~~business on~~ such tax or shall have established to the ~~record date for~~ satisfaction of the ~~determination of holders of shares of Common Stock entitled to receive~~ Company that such ~~dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective~~tax has been paid. (iie) In The portion of the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, principal amount and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio accrued but unpaid interest on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional considerationNote, if any, ~~payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of~~ which is converted into Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed canceled upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (~~iii~~f) The Notice of Conversion (Exhibit A) shall be given to the Company ten (10) days prior to Maturity and shall be effected on the Maturity Date no later than 5:00 p.m. Nevada time on such Day. In ~~case~~ the ~~Corporation shall~~ event that the Notice of Conversion is deemed given to the Company after 5:00 p.m. Nevada time on any Business Day or at any time ~~or from time to time after the Issue Date declare~~on a day that is not a Business Day, ~~order, pay or make a dividend or other distribution (including, without limitation, any distribution~~ Notice of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending Conversion will be deemed given on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading following Business Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Convertible Note (National Automation Services Inc), Convertible Note (National Automation Services Inc)

Conversion. ~~The holders of~~ Subject to and in compliance with the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from~~provisions contained herein, the ~~holders of a majority of the outstanding shares of Series B Preferred Stock~~Holder is entitled, at its option, at any ~~time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from~~ time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the ~~date~~ later of ~~such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes~~ (i) Maturity Date (as the ~~recordholder~~ same may be extended pursuant to Section 6.f. below) and (ii) in the event that the entire remaining principal amount of this Note is not repaid in full on the Maturity Date, the date that the entire remaining principal amount of this Note is repaid, or ~~holders of such shares of Common Stock as of~~ in case this Note or some portion hereof shall have been called for prepayment prior to such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in ~~any one~~ respect of this Note or ~~more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of~~ such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividendportion hereof, ~~distribution or subscription rights or (ii) such reorganization~~until and including, ~~reclassification~~but not after, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business within 30 days of the date of notice of prepayment, to convert the principal amount of and any unpaid interest on this Note (or any portion thereof), into fully paid and nonassessable shares (calculated as to each conversion to the ~~record date for~~ nearest share) of common stock (the ~~determination~~ “Conversion Shares”) of ~~holders~~ the Company by surrender of ~~shares of Common Stock entitled~~ this Note, duly endorsed (if so required by the Company) at its offices, accompanied by written notice to ~~receive such dividend or distribution~~the Company, ~~or (y)~~ in the ~~case of any such subdivision~~form set forth below, ~~reclassification or combination~~that the Holder elects to convert this Note or, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) if less than the ~~Current Market Price (for a period~~ entire principal amount hereof is to be converted, the portion hereof to be converted. The principal amount of ~~15 consecutive trading~~ this Note to be converted by the Holder shall be convertible into the Conversion Shares at the rate of $0.70 per Share. No fractional Conversion Shares shall be issued, and the Company shall pay therefor in cash the fair value of the fractional Conversion Share at the time of conversion. If the Company does not intend to repay this Note on the Maturity Date or expects to default in the payment of the principal amount of this Note on the Maturity Date, the Company shall provide the Holder with written notice not less than 5 business days prior to ~~such date), then, and in each such case~~the Maturity Date. Thereafter, the ~~conversion ratio~~ Company shall ~~be adjusted~~ provide the Holder with not less than 30 days notice prior to repayment of any principal amount of this note in accordance with Section 3 so that the ~~holder of each share of Series B Preferred Stock shall be entitled~~ Holder has an opportunity to ~~receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately~~ covert this Note prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined repayment in accordance with ~~generally accepted accounting principles, during~~ the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offterms hereof. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Convertible Promissory Note (Desert Hawk Gold Corp.), Convertible Promissory Note (Desert Hawk Gold Corp.)

Conversion. ~~The holders of~~ (a) Subject to the ~~Series B~~ terms and conditions contained in this Section 6, the Preferred ~~Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock~~ Shares shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) ~~In case the Corporation shall at any time or~~ from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, ~~issue shares~~ the holders of ~~Common Stock~~ Preferred Shares shall have the right, at ~~a price per share~~their option (the “Optional Conversion Right”), to convert some or ~~securities convertible into or exchangeable for shares~~ all of ~~Common Stock ("Convertible Securities") having a "~~their Preferred Shares as set forth in the Holder Conversion ~~Price"~~ Election Notice (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, into the number of ~~shares~~ fully paid and non-assessable Common Shares obtained by dividing the aggregate Stated Liquidation Preference Amount plus any dividends (whether or not earned or declared) accrued and unpaid thereon from the last Dividend Payment Date to, but excluding, the date of ~~Common Stock determined~~ conversion of such specified Preferred Shares by ~~multiplying~~ the Conversion Price (each an “Optional Conversion”); and (ii) at any time following the date that is one (1) year following the Issue Date; provided, that (A) the ~~applicable conversion ratio~~ VWAP of a Common Share for the period of 30 consecutive Trading Days beginning on the ~~day immediately~~ 31st Trading Day prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation ~~upon~~ Conversion Election Date (the ~~conversion, exchange or exercise~~ “Mandatory Conversion VWAP Period”) is in excess of ~~any such Convertible Securities. Neither~~ $[·](A3) ~~the issuance of any~~ (as adjusted for Common Share Events and dividends paid on shares of the Corporation’s Capital Stock in Common ~~Stock (whether treasury shares or newly issued shares~~Shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and ~~the Warrants) nor~~ (B) the ~~issuance~~ Corporation has an effective resale shelf registration statement permitting the resale of ~~shares~~ all of the Common ~~Stock pursuant thereto shall be deemed to constitute an issuance~~ Shares issuable upon conversion of ~~Common Stock or Convertible Securities by~~ the Preferred Shares, the Corporation ~~to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment~~ shall have ~~been made pursuant to this clause~~ the right, at its option (iithe “Mandatory Conversion Right”), to convert all or any number of the ~~Conversion Price computed upon~~ outstanding Preferred Shares into the ~~original issue thereof shall upon expiration be recomputed as if~~ number of fully paid and non-assessable Common Shares obtained by dividing the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities aggregate Stated Liquidation Preference Amount plus any dividends (whether or not ~~exercised~~ earned or ~~converted~~declared) ~~plus~~ accrued and unpaid thereon from the ~~consideration actually received~~ last Dividend Payment Date to, but excluding, the date of conversion of such Preferred Shares by the ~~Corporation upon~~ Conversion Price (the “Mandatory Conversion”). Any such ~~exercise of conversion. (iii) In case the Corporation shall at any time or from time~~ Mandatory Conversion with respect to ~~time after the Issue Date declare~~less than all outstanding Preferred Shares, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be ~~adjusted so that~~ applied pro rata to the ~~holder~~ holders of ~~each share of Series B~~ Preferred ~~Stock shall be entitled to receive, upon the conversion thereof,~~ Shares based on the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or Shares held by ~~or for the account of the Corporation~~each such holder.

Appears in 2 contracts

Sources: Exchange Agreement (Kadmon Holdings, LLC), Waiver and Consent Agreement (Kadmon Holdings, LLC)

Conversion. ~~The holders~~ (i) If a Change of Control occurs or a Qualified Initial Public Offering occurs prior to repayment of this Note in full, then Investor has the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ right, at Investor’s option, to convert the outstanding principal amount of ~~Series B Preferred Stock shall be convertible at the direction of,~~ this Note and ~~by notice~~ all accrued and unpaid interest on this Note immediately prior to the ~~Corporation from, the holders~~ closing of ~~a majority~~ such Change of ~~the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation~~ Control or ~~any transfer agent for such Series,~~ Qualified Initial Public Offering into ~~one thousand (1,000)~~ fully paid and nonassessable shares of ~~Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted,~~ the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Company’s Common Stock at a price per ~~share~~share equal to the Conversion Price. (ii) If the Company shall have delivered a Prepayment Notice, ~~or securities convertible~~ then the Investor has the right, at Investor’s option, to convert the outstanding principal amount of this Note to be prepaid and all accrued and unpaid interest thereon immediately prior to the scheduled prepayment date into ~~or exchangeable for~~ fully paid and nonassessable shares of the Company’s Common Stock at a price per share equal to the conversion price of the series of preferred stock of the Company (~~"Convertible Securities"~~other than Series A Preferred Stock) ~~having a "Conversion Price"~~ first issued by the Company subsequent to the Initial Closing (as defined ~~below~~in the Purchase Agreement) ~~less than the Current Market Price~~ or (~~for a period of 15 consecutive trading days prior to~~ ii) if no such ~~date), then, and in each such case~~shares shall have been issued, the ~~conversion ratio shall be adjusted so that the holder of each~~ fair market value per share of ~~Series B Preferred~~ the Company’s Common Stock, as determined by the Board of Directors of the Company (the “Board”) in good faith (such determination of the fair market value of the Common Stock shall be ~~entitled to receive, upon the conversion thereof, the number~~ not be based on any valuation report prepared for purposes of ~~shares of~~ valuing Common Stock ~~determined by multiplying~~ as provided under Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (~~A) the applicable conversion ratio on the day immediately prior to~~ “Section 409A”); furthermore, any such ~~date by (B) a fraction, the numerator of which~~ valuation shall be based on a methodology for determination of the ~~sum~~ fair market value of ~~(1)~~ the Common Stock which assumes that the number of shares of Common Stock outstanding on includes the ~~date on which such shares~~ conversion of all outstanding securities convertible into or ~~Convertible Securities are issued and (2) the number of additional shares of~~ exchangeable for Common Stock ~~issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding~~ on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof as-converted (including, but not limited to, the ~~Rights~~preferred stock and any convertible debt instruments of the Company)); provided, however, that if the ~~Series B Preferred~~ Investor disputes the Board’s determination of fair market value of the Company’s Common Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock Investor shall be entitled to ~~receive~~have the fair market value of the Company’s Common Stock determined by an independent appraiser selected by the Investor and reasonably acceptable to the Company (such determination of the fair market value of the Common Stock shall be not be based on any valuation report prepared for purposes of valuing Common Stock as provided under Section 409A; furthermore, ~~upon~~ any such valuation shall be based on a methodology for determination of the ~~conversion thereof,~~ fair market value of the Common Stock which assumes that the number of shares of Common Stock ~~determined by multiplying~~ outstanding includes the conversion of all outstanding securities convertible into or exchangeable for Common Stock on an as-converted (~~1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction~~including, but not limited to, the ~~numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date,~~ preferred stock and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors any convertible debt instruments of the ~~Corporation, a certified resolution with respect to which shall be mailed to each holder~~ Company)). All costs of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to any appraisal under this ~~clause (iii~~Section 4(a)(ii) shall be ~~made upon~~ paid equally by the ~~opening of business on~~ Company and the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffInvestor. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Convertible Note (Arista Networks, Inc.), Note Agreement (Arista Networks, Inc.)

Conversion. (a) The ~~holders of the Series B Preferred Stock~~ Lender shall have ~~conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at~~ the ~~direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~option, at any ~~time, at~~ time or from time to time until this Note shall have been paid in full to convert the ~~office~~ outstanding principal and accrued interest of ~~the Corporation or any transfer agent for such Series,~~ this Note into ~~one thousand (1,000) fully~~ fully-paid and nonassessable shares of ~~Common Stock subject~~ the Borrower's voting common stock (xthe "Shares") ~~to adjustment from time to time~~ at the rate of one (1) Share for every One Dollar ($1.00) of such indebtedness then outstanding. (b) As promptly as ~~provided below (as so adjusted~~practicable after the surrender of this Note by the Lender, the ~~"conversion ratio") and (y) (prior~~ Borrower shall deliver or cause to be delivered to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, ~~or to the nominee or nominees of such holder, a certificate or~~ certificates for the full number of ~~shares~~ Shares issuable upon conversion of ~~Common Stock to which such holder shall be entitled as aforesaid~~this Note, in accordance with the provisions hereof. Such conversion shall be deemed to have been made ~~immediately prior to~~ at the ~~close of business on the date of such Conversion Notice~~ time that this Note was surrendered for conversion and the ~~person or persons entitled to receive~~ notice specified herein shall have been received by the ~~shares~~ Borrower. (c) The number of ~~Common Stock~~ Shares issuable ~~upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock~~ upon conversion of ~~shares of Series B Preferred Stock~~ this Note or repayment by the Borrower in Shares shall be ~~made without charge for any issue, stamp or other similar tax in respect~~ proportionately adjusted if the Borrower shall declare a dividend of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of capital stock on its ~~Common Stock or other class of securities~~capital stock, or ~~shall offer for subscription pro rata to the holders of~~ subdivide its ~~Common Stock or other class of securities any additional shares of~~ outstanding capital stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of ~~shares of Common Stock~~Shares by reclassification, ~~(C) combine the outstanding shares of Common Stock into a smaller number of shares~~ stock split or ~~(D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation~~otherwise, ~~then, and in each such case, the conversion ratio in effect~~ which adjustment shall be made effective immediately ~~prior to such event or~~ after the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of ~~any such dividend or distribution~~a dividend, and immediately after the ~~close of business on the record~~ effective date ~~for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y)~~ in the case of a subdivision. The number of Shares issuable upon conversion of this Note or any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio part thereof shall be proportionately adjusted ~~so that~~ in the amount of securities for which the Shares has been changed or exchanged in another transaction for other stock or securities, cash and/or any other property pursuant to a merger, consolidation or other combination. The Borrower shall promptly provide the holder of ~~each share~~ this Note with notice of ~~Series B Preferred Stock shall be entitled~~ any events mandating an adjustment to ~~receive, upon~~ the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issuedratio, or ~~into which the Convertible Securities may convert~~for any planned merger, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issuedconsolidation, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue Share exchange or sale of ~~such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus~~ the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionBorrower. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Convertible Term Note (Bridgeline Software, Inc.), Convertible Term Note (Bridgeline Software, Inc.)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each ~~share of Series B Preferred Stock shall~~ Note may be ~~convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock,~~ converted at any time, in whole or in part, at the ~~office~~ option of the ~~Corporation or any transfer agent for such Series~~holder thereof, in the manner hereinafter provided, into ~~one thousand (1,000) fully~~ fully-paid and nonassessable shares of Common Stock. The Notes shall automatically be converted into shares of Common Stock ~~subject~~ at the then effective Conversion Price for such shares with the consent of the Majority Holders. (xb) ~~to adjustment~~ The initial conversion rate for the Notes shall be 100 shares of Common Stock for each $1,000 in aggregate principal amount of the Notes representing an initial Conversion Price (for purposes of Section 10) of $10.00 per share of the Common Stock. The applicable conversion rate and Conversion Price from time to time in effect is subject to adjustment as ~~provided below~~ hereinafter provided. (~~as so adjusted, the "conversion ratio"~~c) ~~and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number~~ The Company shall not issue fractions of shares of Common Stock ~~which may be reserved for issuance~~ upon ~~such conversion, provided ,that any~~ conversion ~~pursuant to this paragraph A of less than all~~ of the ~~outstanding shares~~ Notes or scrip in lieu thereof. If any fraction of ~~Series B Preferred~~ a share of Common Stock would, except for the provisions of this Section 9(c), be issuable upon conversion of either Note or the Notes, the Company shall in lieu thereof pay to the person entitled thereto an amount in cash equal to the Market Price of such fraction, calculated to the nearest one-hundredth (1/100) of a share. (d) Whenever the conversion rate and Conversion Price shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment~~ adjusted as provided in ~~paragraph VIII.G. B. If~~ Section 10 hereof, the Company shall forthwith file at each office designated for the conversion of the Notes, a statement, signed by the Chairman of the Board, the President, any Vice President or Treasurer of the Company, showing in reasonable detail the facts requiring such adjustment and the conversion rate that will be effective after such adjustment. The Company shall also cause a notice setting forth any such adjustments to be sent by mail, first class, postage prepaid, to the holders of ~~a majority~~ the Notes. If such notice relates to an adjustment resulting from an event referred to in paragraph 10(g), such notice shall be included as part of the ~~outstanding shares~~ notice required to be mailed and published under the provisions of ~~Series B Preferred Stock give notice of~~ paragraph 10(g) hereof. (e) In order to exercise the conversion ~~under paragraph A above~~right, ~~the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt~~ each holder of a ~~Conversion Notice, the holders of Series B Preferred Stock~~ Note shall surrender its Note therefore to the ~~certificate or certificates therefor duly endorsed,~~ Company at ~~the office of the Corporation or of any transfer agent for such Series~~its principal office, and shall give written notice to the Company at such office that such holder elects to convert its Note. Such notice shall also state ~~therein~~ the name or names (with address) in which the certificate or certificates for shares of Common Stock ~~are to~~ which shall be issuable on such conversion shall be issued, subject to any restrictions on transfer relating to such Note or shares of Common Stock upon conversion thereof. If so required by the Company, the Note or Notes surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Company, duly authorized in writing. The ~~Corporation shall, as~~ date of receipt by the Company of the certificates and notice shall be the conversion date. As soon as practicable ~~thereafter~~after receipt of such notice and the surrender of the as aforesaid, ~~issue~~ the Company shall cause to be issued and ~~deliver~~ delivered at such office to such holder, or ~~to the nominee~~ on his or ~~nominees of such holder~~its written order, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and cash as provided in Section 9(c) in respect of any fraction of a share of Common Stock otherwise issuable upon such conversion. (f) Upon any conversion of all or any part of the Notes hereunder, the holders of the Notes shall be ~~treated for all purposes as~~ entitled to receive, at the ~~recordholder~~ election of the Company, cash in respect of any accrued but unpaid interest or ~~holders of such~~ additional shares of Common Stock equal to the amount of accrued but unpaid interest as of ~~such date. The issuance~~ the date of ~~certificates or shares~~ conversion, divided by the Conversion Price then in effect. (g) In the event of ~~Common Stock upon~~ a partial conversion of ~~shares~~ either Note or the Notes, the Company, at its expense, will forthwith issue to the holder or holders thereof a new Note or Notes of ~~Series B Preferred Stock shall be made without charge for any issue~~like tenor representing the portion of the Note or Notes that have not been converted, ~~stamp~~ such Note or ~~other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock~~ Notes to be issued ~~shall be rounded down to~~ in the ~~nearest whole share, and~~ name of the holder thereof or its nominee (upon payment by such holder of ~~Series B Preferred Stock shall be paid in cash for~~ any ~~fractional share~~applicable transfer taxes). D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (~~the time of mailing of such notice shall be deemed to be the time of giving thereof~~h) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation The Company shall at all times when the Notes shall be outstanding reserve and keep available out of its authorized but unissued ~~shares of Common Stock~~stock, ~~solely~~ for the ~~purpose~~ purposes of effecting the conversion of the ~~shares of Series B Preferred Stock~~Notes, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of ~~all outstanding shares~~ the Notes. Before taking any action which would cause an adjustment reducing the conversion price below the then par value of ~~Series B Preferred Stock, and if at any time~~ the ~~number of authorized but unissued~~ shares of Common Stock ~~shall not be sufficient to effect the~~ issuable upon conversion of ~~all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto~~ the ~~holder of Series B Preferred Stock~~Notes, the ~~Corporation~~ Company will take ~~such~~ any corporate action as which may, in the opinion of its counsel, be necessary ~~to increase its authorized but unissued~~ in order that the Company may validly and legally issue fully-paid and nonassessable shares of ~~Common Stock to~~ such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at ~~a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "~~such adjusted Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Securities Purchase Agreement (Coventry Corp), Securities Purchase Agreement (Coventry Corp)

Conversion. ~~The holders~~ (A) Unless such Series A Preferred Units have previously been redeemed pursuant to Section 8 hereof, at the option of the holder thereof, any Series B A Preferred ~~Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall~~ Units may be ~~convertible at the direction of~~converted, ~~and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~in whole or in part, at any ~~time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid~~ time and ~~nonassessable shares of Common Stock subject (x) to adjustment~~ from time to time after the Lockout Date, into such number of Common Units obtained by dividing the aggregate Series A Liquidation Preference (including for this purpose any distributions accrued and unpaid in respect of any prior Series A Distribution Periods but not the then-current Series A distribution Period) of such Series A Preferred Units by the estimated fair market value of one common share in the REIT (the “Estimated Market Value”) as ~~provided below~~ determined by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Co., Inc. or another nationally recognized independent valuation firm with expertise in valuing the securities of real estate investment trusts, reasonably acceptable to the Partnership and holders owning at least sixty six and two thirds percent (~~as so adjusted~~66 and 2/3%) of Series A Preferred Units. (B) In order to exercise the conversion right, the ~~"conversion ratio") and (y) (prior to the consummation~~ holder of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph each applicable Series A ~~of less than all of the outstanding shares of Series B~~ Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock Unit shall surrender the certificate representing such Series A Preferred Unit, duly endorsed or ~~certificates therefor duly endorsed~~assigned to the Partnership in blank, to the Partnership, accompanied by written notice to the Partnership that the holder thereof elects to convert such Series A Preferred Units. (C) Holders of Series A Preferred Units at the ~~office~~ close of business on the ~~Corporation or of~~ record date (a “Series A Distribution Record Date”) in respect if any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder Series A Distribution Payment Date shall be entitled ~~as aforesaid. Such~~ to receive the distribution payable on such units on the corresponding Series A Distribution Payment Date notwithstanding the conversion thereof following such Series A Distribution Record Date and prior to such Series A Distribution Payment Date. (D) Each conversion shall be deemed to have been ~~made~~ effected immediately prior to the close of business on the date of on which the certificate for the Series A Preferred Units shall have been surrendered and such ~~Conversion Notice and~~ notice received by the ~~person~~ Partnership as aforesaid. (E) No fractional units or ~~persons entitled to receive the shares~~ scrip representing fractions of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares Units shall be issued upon conversion of the Series A Preferred Units. Instead of any ~~shares~~ fractional interest in a Common Unit that would otherwise be deliverable upon the conversion of a Series B A Preferred ~~Stock and~~ Unit, the ~~number of shares of Common Stock~~ Partnership shall pay to ~~be issued shall be rounded down to the nearest whole share, and~~ the holder of such Series B A Preferred ~~Stock~~ Unit an amount equal in cash based upon the then Estimated Market Price. If more than one Series A Preferred Unit shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion ~~shall be entitled to receive~~ at one time by the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereofsame holder, the number of ~~shares of~~ Common ~~Stock determined by multiplying (A) the applicable~~ Units issuable upon conversion ~~ratio~~ thereof shall be computed on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum basis of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share number of Series B A Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffUnits so surrendered. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Agreement of Limited Partnership (Lightstone Value Plus Real Estate Investment Trust, Inc.), Agreement of Limited Partnership (Lightstone Value Plus Real Estate Investment Trust, Inc.)

Conversion. ~~The holders~~ (a) Subject to and upon compliance with the provisions of this Certificate of Designation including Section 8(g) below, the holder of any Series B C Preferred Stock shall have ~~conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible~~ the right, at its option, at any time after the ~~direction of, and by notice~~ Initial Issuance Date to ~~the Corporation from, the holders of a majority of the outstanding~~ convert any shares of Series B C Preferred ~~Stock, at any time, at the office~~ Stock into that number of ~~the Corporation or any transfer agent for such Series, into one thousand (1,000)~~ fully paid and ~~nonassessable~~ non-assessable shares of Common Stock ~~subject (x) to adjustment from time to time as provided below~~ (as ~~so adjusted,~~ such shares shall then be constituted) obtained by multiplying the ~~"conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available~~ number of shares of ~~Common~~ Series C Preferred Stock ~~which may~~ to be ~~reserved for issuance upon~~ converted by the Conversion Ratio (as defined below) in effect at such ~~conversion~~time, ~~provided ,that any conversion pursuant to this paragraph A of less than all~~ by surrender of the ~~outstanding~~ certificate evidencing such shares of Series B C Preferred Stock ~~shall~~ so to be ~~on a pro rata basis amongst all holders~~ converted in the manner provided. A holder of Series B C Preferred ~~Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject~~ Stock is not entitled to ~~adjustment as provided in paragraph VIII.G. B. If the holders~~ any rights of a ~~majority~~ holder of ~~the outstanding~~ Common Stock until such holder has converted shares of Series B C Preferred Stock ~~give notice~~ to Common Stock, and only to the extent such shares of Series C Preferred Stock are deemed to have been converted to Common Stock under this Section 8. (b) In order to exercise the conversion ~~under paragraph A above~~privilege with respect to any shares of Series C Preferred Stock, the ~~Corporation shall notify all other record holders~~ holder of ~~Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock~~ shares to be converted shall surrender ~~the certificate or certificates therefor~~ such shares, duly endorsed, at ~~the~~ an office of or agency maintained by the Corporation ~~or of any transfer agent~~ for such ~~Series~~purposes, and shall give written notice of conversion in the form provided on the certificate evidencing Series C Preferred Stock (or such other notice which is acceptable to the Corporation) to the office or agency that the holder elects to convert shares of Series C Preferred Stock. Such notice shall also state ~~therein~~ the name or names (with address or addresses) in which the certificate or certificates for shares of Common Stock which shall be issuable on such conversion shall be issued, and shall be accompanied by transfer taxes, if required pursuant to Section 8(f). Each share of Series C Preferred Stock surrendered for conversion shall, unless the shares issuable on conversion are to be ~~issued~~issued in the same name as the registration of such Series C Preferred Stock, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Corporation duly executed by, the holder or his duly authorized attorney. ~~The Corporation shall, as soon~~ As promptly as practicable ~~thereafter~~after satisfaction of the requirements for conversion set forth above, subject to compliance with any restrictions on transfer if shares issuable on conversion are to be issued in a name other than that of the holder (as if such transfer were a transfer of the Series C Preferred Stock), the Corporation shall issue and shall deliver ~~at such office~~ to such ~~holder,~~ holder at the office or to agency maintained by the ~~nominee or nominees of~~ Corporation for such ~~holder~~purpose, a certificate or certificates for the number of full shares of Common Stock to ~~which~~ be issued by the Corporation upon the conversion of shares of Series C Preferred Stock in accordance with the provisions of this Section 8 and a check or cash in respect of any fractional interest in respect of a share of Common Stock arising upon such ~~holder~~ conversion, as provided in Section 8(c). In case any Series C Preferred Stock shall be ~~entitled as aforesaid~~surrendered for partial conversion, the Corporation shall execute and deliver to the holder of the Series C Preferred Stock so surrendered, without charge to such holder, a new certificate evidencing the unconverted shares of Series C Preferred Stock evidenced by the surrendered certificate. ~~Such~~ Each conversion shall be deemed to have been ~~made immediately prior~~ effected as to ~~the close of business~~ any such Series C Preferred Stock on the date of on which the requirements set forth above in this Section 8(b) have been satisfied as to such ~~Conversion Notice~~ Series C Preferred Stock, and the ~~person~~ Person in whose name any certificate or ~~persons entitled to receive the~~ certificates for shares of Common Stock shall be issuable upon such conversion shall be ~~treated~~ deemed to have become on said date the holder of record of the shares represented thereby; provided, however, that any such surrender on any date when the stock transfer books of the Company shall be closed shall constitute the Person in whose name the certificates are to be issued as the record holder thereof for all purposes as on the ~~recordholder or holders of~~ next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Ratio in effect on the date upon which such Series C Preferred Stock shall be surrendered. (c) No fractional shares of Common Stock ~~as of such date. The issuance of certificates~~ or ~~shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No~~ scrip representing fractional shares shall be issued upon conversion of Series C Preferred Stock. If any fractional share of stock would be issuable upon the conversion of any share or shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B C Preferred Stock, the Corporation ~~will take such corporate action as may~~shall make an adjustment and payment therefor in cash at the fair market value per share. To the extent the Common Stock is listed or quoted for trading on a recognized national trading market, in the ~~opinion~~ current market price of ~~its counsel,~~ a share of Common Stock shall be ~~necessary~~ the Closing Price on the last business day immediately preceding the day on which the Series C Preferred Stock is deemed to ~~increase its authorized but unissued~~ have been converted. (d) The conversion ratio applicable to the Series C Preferred Stock shall be 1,000 shares of Common Stock ~~to such number of shares as shall be sufficient~~ for ~~such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares~~ each share of Series B C Preferred Stock ~~shall be deemed given if sent by facsimile transmission~~(herein called the “Conversion Ratio”), by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment as provided in this Section 8. (e) The Conversion Ratio shall be adjusted from time to time by the Corporation as follows: (i1) In case the Corporation shall ~~at any time or from time to time after the Issue Date (A)~~ hereafter pay a dividend or make a ~~distribution, on~~ distribution to all holders of the outstanding ~~shares of~~ Common Stock in shares of Common Stock, ~~(B) subdivide~~ the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio Conversion Ratio in effect ~~immediately prior to such event or~~ at the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close opening of business on the ~~record~~ date following the date fixed for the determination of ~~holders of shares of Common Stock~~ stockholders entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio other distribution shall be ~~adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined~~ increased by multiplying ~~(A) the applicable conversion ratio on the day immediately prior to~~ such ~~date~~ Conversion Ratio by ~~(B)~~ a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding at the close of business on the date fixed for such ~~date~~ determination and (y) the ~~number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the~~ total number of shares ~~of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of~~ constituting such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the ~~current market price per share~~ number of ~~the~~ shares of Common Stock outstanding at the close of business on the date fixed for ~~the period of 20 Trading Days proceeding~~ such ~~35th Trading Day. An adjustment made pursuant~~ determination, such increase to ~~this clause (iii) shall be made upon~~ become effective immediately after the opening of business on the ~~next Business Day~~ day following the date fixed for such determination. The Corporation will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Corporation. If any dividend or distribution of the type described in this Section 8(e)(1) is declared but not so paid or made, the Conversion Ratio shall again be adjusted to the Conversion Ratio which would then be in effect if such dividend or distribution had not been declared. (2) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Ratio in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Ratio in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately decreased, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (3) Whenever the Conversion Ratio is adjusted as herein provided, the Corporation shall prepare a notice of such adjustment of the Conversion Ratio setting forth the adjusted Conversion Ratio and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Ratio to each holder of Series C Preferred Stock at his last address appearing on the share register, within twenty (20) days after the effectiveness thereof. Failure to deliver such notice shall not affect the legality or validity of any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offadjustment. (iv4) For purposes of this ~~paragraph G~~Section 8(e), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Corporation will not pay any dividend or make any distribution on shares of Common Stock ~~then owned or~~ held ~~by or for~~ in the ~~account~~ treasury of the Corporation. (f) The issuance of stock certificates on conversions of shares of Series C Preferred Stock shall be made without charge to the converting holder for any tax in respect of the issue thereof. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of stock in any name other than that of the holder of any share of Series C Preferred Stock converted, and the Corporation shall not be required to issue or deliver any such stock certificate unless and until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. (g) The Corporation shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for the conversion of the shares of Series C Preferred Stock from time to time as such are presented for conversion. The Company covenants that all shares of Common Stock which may be issued upon conversion of Series C Preferred Stock will upon issuance be fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issuance thereof, other than those created by or imposed upon the holders through no action of the Company. If at any time a holder of shares of Series C Preferred Stock seeks to convert shares of Series C Preferred Stock pursuant to Section 8(b), and the Company does not have sufficient authorized but unissued shares of Common Stock available to effect such conversion, the Company shall promptly (i) take all action within its control to cause a sufficient number of additional shares to be authorized and (ii) issue to the holder (or holders, if more than one holder seeks to convert shares of Series C Preferred Stock pursuant to Section 8(b) on the same date, pro-rata based on the ratio that the number of shares of Series C Preferred Stock then held by each such holder bears to the aggregate number of such shares held by such holders) all of the shares of Common Stock that are available to effect such conversion. The number of shares of Series C Preferred Stock sought to be converted which exceeds the amount which is then convertible into available shares of Common Stock (the “Excess Amount”) shall not be convertible into Common Stock in accordance with the terms hereof until (and at the holder’s option at any time after) the date additional shares of Common Stock are authorized by the Company to permit such conversion. (h) If any shares of Series C Preferred Stock remain outstanding on the Mandatory Conversion Date (as defined below), then all such shares of Series C Preferred Stock will be automatically converted as of such date in accordance with this Section 8 as if the holders of such shares of Series C Preferred Stock had exercised a privilege to convert such shares and voluntarily surrendered such shares for conversion on the date immediately preceding the Mandatory Conversion Date, and the conversion date had been fixed as of the Mandatory Conversion Date. All holders of Series C Preferred Stock shall thereupon and within ten (10) business days after receipt of notice of the occurrence of the Mandatory Conversion Date surrender all certificates for Series C Preferred Stock, duly endorsed for cancellation, to the Corporation. No Person shall thereafter have any rights in respect of Series C Preferred Stock, except the right to receive shares of Common Stock on conversion thereof. “Mandatory Conversion Date” means the first date on which the Corporation has sufficient authorized but unissued shares of Common Stock, together with shares of Common Stock held in treasury, to provide for conversion in full of the Series C Preferred Stock, after taking into account shares reserved for issuance upon exercise of outstanding rights, warrants and options and upon conversion of outstanding convertible securities.

Appears in 2 contracts

Sources: Loan and Security Agreement (Image Entertainment Inc), Securities Purchase Agreement (Image Entertainment Inc)

Conversion. ~~The holders~~ (i) Each outstanding share of ~~the Series B Preferred~~ Class A Common Stock shall ~~have conversion rights as follows: A. Each~~ automatically convert into one share of ~~Series B Preferred~~ Class C Common Stock ~~shall be convertible at~~ immediately upon (A) the ~~direction of, and by notice~~ transfer thereof to any Person other than a Permitted Transferee who is also a Principal or a Related Party or (B) the ~~Corporation from, the holders~~ occurrence of a ~~majority~~ Class B Event, in either case with no further action on the part of any holder thereof. (ii) Upon the ~~outstanding~~ conversion of any shares of ~~Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of~~ Class A Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A clause (i) above, the ~~Corporation~~ holder thereof shall ~~notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall~~ promptly surrender the certificate or certificates ~~therefor~~ representing the shares of Class A Common Stock so converted, duly endorsed, at to the ~~office~~ Secretary of the Corporation or of to any transfer agent for the Class A Common Stock. If so required by the Corporation, any certificate for shares surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder of such ~~Series~~shares or the duly authorized representative of such holder. Upon receipt by the Secretary or transfer agent of the foregoing certificate or certificates and, ~~and~~ if required, instruments of transfer, the Corporation shall ~~state therein~~ cause to be issued to the ~~name or names in which~~ holder who surrendered the certificate or certificates ~~for~~ representing shares of Class A Common Stock ~~are~~ or such holder's nominee or nominees, a certificate or certificates representing either (A) the appropriate number of shares of Class C Common Stock (in the case of a conversion pursuant to ~~be issued. The Corporation shall~~clause (i)(A) above) or (B) one share of Class C Common Stock for each share of Class A Common Stock represented by such surrendered certificate (in the case of a conversion pursuant to clause (i)(B) above), ~~as soon as practicable thereafter,~~ and shall issue and deliver ~~at such office~~ to such holder, or ~~to the~~ such holder's nominee or ~~nominees~~ nominees, such certificate or certificates as well as, in the case of ~~such holder~~a conversion pursuant to clause (i)(A) above, a certificate or certificates ~~for the number of~~ representing any shares of Class A Common Stock ~~to which~~ represented by such ~~holder shall be entitled as aforesaid~~surrendered certificate that were not transferred in a manner that effected a conversion thereof into shares of Class C Common Stock. Such conversion shall be deemed to have been ~~made immediately prior to~~ effected at the close of business on the date of the occurrence of the event giving rise to such ~~Conversion Notice~~ conversion, and the ~~person~~ Person or ~~persons~~ Persons entitled to receive the shares of Class C Common Stock issuable upon such conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such shares of Class C Common Stock as on that date. (iii) A number of ~~such date. The issuance of certificates or~~ shares of Class C Common Stock equal to the number of shares of Class A Common Stock outstanding from time to time shall be set aside and reserved for issuance upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Class A Common Stock into ~~a larger number of shares of~~ Class C Common Stock~~, (C) combine the outstanding shares~~ . Shares of Class A Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio converted pursuant to clause (i) shall be retired and may not be reissued. Shares of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but Class A Common Stock shall not ~~limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of~~ be convertible into shares of Class B Common Stock. Shares of Class B Common Stock ~~pursuant thereto~~ shall not be ~~deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration~~ convertible into shares of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares class of Common Stock~~, the numerator~~ . Shares of ~~such fraction~~ Class C Common Stock shall not be ~~the sum~~ convertible into shares of ~~the Current Market Price per share~~ any other class of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffStock. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Agreement and Plan of Restructuring and Merger (Liberty Media Corp /De/), Agreement and Plan of Restructuring and Merger (Unitedglobalcom Inc)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice~~ (a) Subject to the ~~Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time~~adjustments provided in this Section 5, at the ~~office of~~ Holder's election and anytime, Holder may convert the ~~Corporation or any transfer agent for such Series,~~ Note into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number an amount of shares of the Company's Common Stock ~~which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant~~ equal to ~~this paragraph A of less than all~~ 3% of the ~~outstanding shares of Series B Preferred Stock shall be~~ Company's Common Stock, on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Seriesfully diluted basis, and shall ~~state therein the name or names in which the certificate or certificates for shares of Common Stock are to~~ be ~~issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or~~ subject to the ~~nominee or nominees~~ anti-dilution protections set forth in the Letter Agreement of ~~such holder, a certificate or certificates for~~ even date herewith. To the ~~number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been~~ extent that any principal payments are made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of ~~such issuance. C. No fractional shares~~ the Note and retained by the Holder, the right of Holder to convert the principal amount into the Conversion Shares shall be ~~issued upon conversion~~ reduced proportionately based on the ratio between the amount of ~~any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down~~ principal repayed to the ~~nearest whole share, and~~ original principal amount of this Note. It is intended by the ~~holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution~~ foregoing that to the ~~holders of its Common Stock or other class of securities~~extent the principal amount has not been retired, ~~or shall offer for subscription pro rata to~~ that the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or Holder shall be entitled to ~~exchange their Common Stock for securities or other property deliverable upon~~ the dilution protection set forth in Section 4 of the Letter Agreement including without limitation, such ~~reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as~~ that Holder receives an appropriate amount of Conversion Shares up to 3% of the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Company's outstanding Common Stock, ~~solely~~ computed on a fully diluted basis, upon the conclusion of an Initial Public Offering. (b) Notwithstanding anything in this Agreement to the contrary, in order to preserve for ~~the purpose of effecting~~ Holder the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stockrights set forth above, the ~~Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as~~ following additional provisions shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as followsapply: (i) In Prior to any optional prepayment of this Note, Company will provide Lender 10 days written notice of such intent, in which case Holder may notify Company in writing that it is electing to convert all (or the ~~Corporation shall at any time or from time~~ portion subject to ~~time after the Issue Date (A~~prepayment) ~~pay a dividend or make a distribution, on the outstanding shares~~ of this Note into Shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective.as set forth herein; (ii) In the ~~case~~ event of any payment associated with the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such caseCollateral Security Agreements, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying Company will use its best efforts (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which including requiring any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution obligors with respect to ~~which~~ the Collateral) to notify Holder that a payment has been (or will be) made. In such event, Holder shall ~~be mailed to each holder of shares of Series B Preferred Stock)~~ have 10 days after receipt of such ~~dividend or distribution; provided, however, that in~~ payment to return the ~~event~~ like amount of ~~a distribution of shares of capital stock of a Subsidiary of~~ cash to Company so as to maintain the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offconversion rights set forth herein. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Convertible Promissory Note Agreement (Team Communication Group Inc), Convertible Promissory Note Agreement (Team Communication Group Inc)

Conversion. ~~The holders of~~ If any and all amounts due hereunder are not paid in full on or before the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders~~ closing of a ~~majority of the outstanding shares of Series B Preferred Stock, at any time~~Qualified Financing, at the ~~office~~ election of Holder, the ~~Corporation or~~ entire principal balance of this Note, together with any ~~transfer agent for such Series~~accrued and unpaid interest thereon, shall convert into ~~one thousand (1,000)~~ fully paid and ~~nonassessable~~ non-assessable shares ~~of Common Stock subject~~ (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded ~~down~~ up to the nearest whole share) of the series of preferred stock of the Company issued pursuant to such Qualified Financing (the “Conversion Shares”), ~~and~~ such conversion to occur promptly following the ~~holder~~ delivery by Holder of ~~Series B Preferred Stock~~ a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”). The number of Conversion Shares to be issued to Holder upon conversion of this Note pursuant to a Qualified Financing shall be ~~paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution~~ equal to the ~~holders~~ quotient obtained by dividing the entire principal balance of ~~its Common Stock~~ this Note, together with any accrued and unpaid interest thereon, as of the date of conversion, by the Mandatory Conversion Price. A “Qualified Financing” shall mean sale (or series of related sales, all of which are consummated within ninety (90) days of each other) by the Company of shares of preferred stock after March 27, 2020 with the principal purpose of raising capital and with aggregate gross cash proceeds to the Company of not less than $3,600,000 (or such other amount approved in writing by Holder). The issuance of Conversion Shares pursuant to the conversion of this Note in connection with a Qualified Financing shall be upon and subject to the same terms and conditions applicable to the Conversion Shares sold in the Qualified Financing. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other ~~class~~ type of ~~securities~~guarantee or notarization) of any Notice of Conversion from be required. To effect conversions hereunder, or the Holder shall ~~offer for subscription pro rata~~ physically surrender this Note to the ~~holders~~ Company as promptly as is reasonably practicable after Holder’s receipt of ~~its Common Stock or other class~~ the Conversion Shares. Upon conversion of ~~securities any additional shares of stock of any class or any other right~~this Note in full, ~~or there~~ Company shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice forever released from all its obligations and liabilities under this Note and this Note shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective cancelled as of such ~~35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at~~ time and any ~~time outstanding shall not include any shares of Common Stock then owned or held by or for the account~~ collateral of the ~~Corporation~~Company pledged under the Security Agreement shall be released.”

Appears in 2 contracts

Sources: 12% Senior Secured Convertible Note (FWHC Holdings, LLC), 12% Senior Secured Convertible Note (H-Cyte, Inc.)

Conversion. ~~The holders~~ (a) Except as provided in the next succeeding sentence, each share of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B~~ Convertible Preferred Stock shall be convertible at ~~the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at~~ any time, after the Requisite NYSE Shareholder Approval is obtained, at the ~~office~~ option of the ~~Corporation or any transfer agent for such Series~~Holder thereof, into ~~one thousand (1,000)~~ validly issued, fully paid and ~~nonassessable~~ non-assessable shares of the Company Common Stock ~~subject~~ (x"Conversion Shares") at the Conversion Price, determined as hereinafter provided, in effect at the time of conversion. Unless default be made in the payment in full of the Redemption Price and any accrued and unpaid dividends, shares of Convertible Preferred Stock called for redemption in accordance with the terms herein shall cease to ~~adjustment from time to time as provided below~~ be convertible into Conversion Shares at the close of business on the redemption date. The Conversion Price shall be initially $5.25 per share. The number of Conversion Shares issuable upon conversion of a share of Convertible Preferred Stock is determined by dividing the Liquidation Price (inclusive of any accrued and unpaid dividends) of a share of Convertible Preferred Stock by the Conversion Price in effect on the Conversion Date (as ~~so adjusted, the "conversion ratio"~~hereinafter defined) and ~~(y) (prior~~ rounding the result to the ~~consummation~~ nearest 1/100th of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock a share. The Conversion Price shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1",~~ subject to adjustment as provided ~~in paragraph VIII.G. B. If~~ below. Upon conversion, any accrued and unpaid dividends on the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Convertible Preferred Stock shall be paid to the Holder thereof in accordance with the provisions of Section 3. If a holder converts more than one share at the same time, the number of full shares issuable upon the conversion shall be based upon the total number of shares converted. (b) In order to convert shares of the Convertible Preferred Stock into Conversion Shares, the Holder thereof shall surrender ~~the certificate or certificates therefor duly endorsed,~~ at the office ~~of the Corporation or~~ of any transfer agent for ~~such Series~~the Convertible Preferred Stock (or in the absence of any transfer agent, ~~and shall state therein~~ the ~~name or names in which~~ Corporation) the certificate or certificates ~~for shares of Common Stock are to be issued. The Corporation shall~~therefor, ~~as soon as practicable thereafter, issue and deliver at such office to such holder, or~~ duly endorsed to the ~~nominee~~ Corporation or ~~nominees~~ in blank, and give written notice to the Corporation at said office that he or she elects to convert such shares. Shares of ~~such holder, a certificate or certificates for~~ the ~~number of shares of Common~~ Convertible Preferred Stock ~~to which such holder shall be entitled as aforesaid. Such conversion~~ shall be deemed to have been ~~made~~ converted immediately prior to the close of business on the date of surrender of such shares for conversion in accordance with the foregoing provisions (hereinafter the "Conversion ~~Notice~~ Date"), and the person or persons entitled to receive ~~the shares of Common Stock~~ Conversion Shares issuable upon such conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such ~~shares of Common Stock~~ Conversion Shares at such time. As promptly as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and practicable after the ~~Recapitalization~~Conversion Date, the Corporation shall issue and deliver at ~~all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely~~ said office the certificate or certificates for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of ~~authorized but unissued shares~~ full Conversion Shares issuable upon such conversion, together with a cash payment in lieu of ~~Common Stock shall not be sufficient~~ any fraction of a Conversion Share, as hereinafter provided, to ~~effect~~ the ~~conversion~~ person or persons entitled to receive the same or to the nominee or nominees of ~~all then outstanding shares of Series B Preferred Stock, then in addition to~~ such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposesperson or persons. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. (c) The ~~conversion ratio~~ Conversion Price shall be subject to adjustment ~~from time to time~~ as follows: (i) In case the Corporation shall ~~at any time or from time to time after the Issue Date~~ (Ai) pay a dividend ~~or make a distribution, on the outstanding shares of Common Stock~~ in shares of any class of its Common ~~Stock~~Stock to all holders of such class, (Bii) make a distribution in shares of any class of its Common Stock to all holders of such class, (iii) subdivide ~~the~~ any of its outstanding ~~shares of~~ Common Stock into a ~~larger~~ greater number of ~~shares of Common Stock~~shares, or (Civ) combine ~~the~~ any of its outstanding ~~shares of~~ Common Stock into a smaller number of ~~shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case~~shares, the ~~conversion ratio~~ Conversion Price in effect immediately prior ~~to such event or the record date therefor, whichever is earlier,~~ thereto shall be adjusted so that the holder of any shares of ~~Series B~~ Convertible Preferred Stock thereafter surrendered for conversion shall be entitled to receive ~~the~~ that number of Conversion Shares representing the percentage of all outstanding shares of Common Stock ~~or other securities of~~ which the ~~Corporation which such holder~~ Holder would have owned ~~or have been entitled to receive after the happening of any of the events described above,~~ had such ~~shares of Series B~~ Convertible Preferred Stock been ~~surrendered for conversion~~ converted immediately prior to the happening of such event or and the ~~record date therefor, whichever is earlier~~Conversion Price shall be adjusted accordingly. An adjustment made pursuant to this ~~clause~~ subsection (i) shall become effective ~~(x)~~ immediately after the record date in the case of ~~any such~~ a dividend in shares or ~~distribution,~~ distribution and shall become effective immediately after the ~~close~~ effective date in the case of ~~business on~~ subdivision or combination. (ii) In case the Corporation shall issue Equity Equivalents to all or substantially all holders of any class of its Common Stock or to any other person (other than the Holders) entitling such person or persons to subscribe for, purchase or otherwise acquire shares of Common Stock (or securities in any manner representing the right to acquire Common Stock) at a price per share that is less than the then Current Market Price per share of Common Stock (as determined in accordance with subsection (v) below) at the record date for the determination of ~~holders of shares of Common Stock~~ shareholders entitled to receive such ~~dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business~~ Equity Equivalents on the ~~day upon which such corporate action becomes effective. (ii) In~~ date of issuance thereof or, with respect to issuances to persons other than Holders, on the ~~case the Corporation shall~~issue date, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as ~~defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case~~applicable, the ~~conversion ratio~~ Conversion Price in effect immediately prior thereto shall be adjusted so that the ~~holder~~ same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to such record date or issue date, as applicable, by a fraction of ~~each share of Series B Preferred Stock~~ which the numerator shall be ~~entitled to receive, upon the conversion thereof,~~ the number of shares of Common Stock outstanding on such record date or issue date, as applicable, plus the number of shares which the aggregate offering price of the total number of shares of Common Stock so offered, (or the aggregate conversion price of the convertible securities so offered) would purchase at such Current Market Price (as defined in subsection (iv) below), and of which the denominator shall be the number of shares of Common Stock outstanding on such record date or issue date, as applicable, plus the number of additional shares of Common Stock offered (or into which the convertible securities so offered are convertible). Such adjustment shall be made successively whenever any Equity Equivalents are issued, and shall become effective immediately after such record date or such sale date, as applicable. If at the end of the period during which such Equity Equivalents are exercisable not all such Equity Equivalents shall have been exercised, the adjusted Conversion Price shall be readjusted to what it would have been based upon the number of additional shares of Common Stock actually issued (or the number of shares of Common Stock issuable upon conversion of convertible securities actually issued). (iii) In case the Corporation shall distribute to all or substantially all holders of any class of Common Stock any shares of capital stock of the Corporation (other than Common Stock), evidences of indebtedness or other non-cash assets (including securities of any company other than the Corporation), or shall distribute to all or substantially all holders of any class of Common Stock rights or warrants to subscribe for or purchase any of its securities (excluding those referred to in subsection (ii) above), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying ~~(A)~~ the ~~applicable conversion ratio on the day~~ Conversion Price in effect immediately prior to the date of such ~~date~~ distribution by ~~(B)~~ a ~~fraction,~~ fraction of which the numerator ~~of which~~ shall be the ~~sum~~ Current Market Price per share (as defined in subsection (iv) below) of the Conversion Shares on the record date mentioned below less the fair market value on such record date (1as reasonably determined by the Board of Directors, whose determination shall be conclusive evidence of such fair market value) of the portion of the capital stock or assets or evidences of indebtedness so distributed or of such rights or warrants applicable to one share of Common Stock (determined on the basis of the number of shares of Common Stock outstanding on the record date), and of which the denominator shall be the Current Market Price per share (as defined in subsection (iv) below) of the Conversion Shares on such record date. Such adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive such distribution. (i) if such conversion occurs on ~~which~~ or prior to the date for the distribution to the holders of Rights of separate certificates evidencing such ~~shares or Convertible Securities are issued and~~ Rights (2) the "Distribution Date"), the same number of ~~additional~~ Rights to which a holder of a number of shares of Common Stock ~~issued~~equal to the number of Conversion Shares is entitled at the time of such conversion in accordance with the terms and provisions of and applicable to the Rights and (ii) if such conversion occurs after the Distribution Date, ~~or into~~ the same number of Rights to which ~~the Convertible Securities may convert, and the denominator~~ a holder of ~~which shall be the sum of (x)~~ the number of shares of Common Stock ~~outstanding on such date and (y) the number of shares of Common Stock~~ into which the ~~aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate~~ principal amount of the ~~Conversion Price~~ security so converted was convertible immediately prior to the Distribution Date would have been entitled on the Distribution Date in accordance with the terms and provisions of ~~such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant~~ and applicable to ~~this clause~~ the Rights. (iv) For the purpose of any computation under subsections (ii) ~~shall be made on the next Business Day following the date on which any such issuance is made~~ and ~~shall be effective retroactively immediately after the close of business on such date. For purposes~~ (iii) of this ~~clause (ii~~Section 9(c), the ~~aggregate consideration receivable by~~ current market price (the ~~Corporation in connection with the issuance of~~ "Current Market Price") per Conversion Share on any ~~securities~~ date shall be deemed to be equal to the ~~sum~~ average of the ~~aggregate offering price to~~ daily closing prices of the ~~public (before deduction of underwriting discounts~~ Common Stock on the NYSE or, if not then listed or ~~commissions and expenses payable to third parties)~~traded on the NYSE, ~~and~~ such other exchange, market or system that the ~~"Conversion Price" of any Convertible Securities~~ Common Stock is ~~the total amount received~~ then listed or ~~receivable by the Corporation as consideration~~ traded on for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day 10 trading days immediately prior to the record date ~~fixed for~~ or date of issuance with respect to distributions, issuances or other events requiring such computation under subsection (ii) or (iii) above; provided that in the ~~determination~~ case of ~~stockholders entitled to receive such dividend or distribution by (2) a fraction~~an underwritten public offering of Equity Equivalents which are currently traded, the ~~numerator of which~~ Current Market Price shall be the ~~then Current Market Price per share~~ closing price of the Common Stock ~~for~~ on the ~~period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record~~ issuance date, less an allowance for a customary discount to the ~~Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect~~ current market trading price which is reasonably required to ~~which shall be mailed to~~ effect such offering. The closing price for each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction day shall be the ~~sum~~ closing price on the NYSE or the last reported sales price or, if the Conversion Shares are not listed or admitted to trading on the NYSE, on the principal national securities exchange on which the Conversion Shares are listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, the closing sales price of the Conversion Shares as quoted by NASDAQ or, in case no reported sale takes place, the average of the closing bid and asked prices as quoted by NASDAQ or any comparable system or, if the Conversion Shares are not quoted on NASDAQ or any comparable system, the closing sales price or, in case no reported sale takes place, the average of the closing bid and asked prices, as furnished by any two members of the National Association of Securities Dealers, Inc. selected from time to time by the Corporation for that purpose. If no such prices are available, the Current Market Price per share shall be the fair value of ~~Common Stock for~~ a Conversion Share as reasonably determined by the ~~period~~ Board of ~~20 Trading~~ Directors. (v) In any case in which this Section 9 shall require that an adjustment be made following a record date the Corporation may elect to defer (but only until five Business Days ~~preceding~~ following the ~~35th Trading Day after~~ mailing by the ~~effective date of such Spin-Off and~~ Corporation to the ~~Current Market Price~~ holders of the ~~number~~ notice of ~~shares~~ adjustment described in subsection (or ix) below) issuing to the ~~fraction~~ Holder of ~~a share) of~~ any Convertible Preferred Stock converted after such record date the Conversion Shares and other capital stock of the ~~Subsidiary~~ Corporation issuable upon such conversion over and above the Conversion Shares and other capital stock of the Corporation issuable upon such conversion only on the basis of the Conversion Price prior to adjustment; and, in lieu of the shares the issuance of which is ~~distributed in~~ so deferred, the Corporation shall issue or cause its transfer agents to issue due bills or other appropriate evidence prepared by the Corporation of the right to receive such ~~Spin-Off~~ shares. If any distribution in respect of ~~one share of Common Stock for~~ which an adjustment to the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant Conversion Price is required to ~~this clause (iii) shall~~ be made ~~upon the opening~~ as of ~~business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on~~ the record date ~~fixed~~ therefor is not thereafter made or paid by the Corporation for any reason, the ~~determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso~~ Conversion Price shall be readjusted to the ~~preceding sentence applies,~~ Conversion Price which would then be in effect if such ~~adjustment shall be made and be effective as of~~ record date had not been fixed or such ~~35th Trading Day after the~~ effective date ~~of such Spin-Off~~had not occurred. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Preferred Stock Subscription Agreement (Asc East Inc), Preferred Stock Subscription Agreement (American Skiing Co /Me)

Conversion. ~~The holders~~ This Warrant may be converted by the holder hereof, in whole or in part, into shares of Common Stock, during normal business hours on any Business Day on or prior to the ~~Series B Preferred Stock shall have~~ Expiration Date, by surrender of this Warrant to the Company at its office maintained pursuant to Section 10.2(a) hereof, accompanied by a conversion ~~rights as follows: A. Each share of Series B Preferred Stock shall be convertible at~~ notice in substantially the ~~direction of~~form attached to this Warrant (or a reasonable facsimile thereof) duly executed by such holder, and ~~by notice~~ such holder shall thereupon be entitled to ~~the Corporation from~~receive a number of duly authorized, ~~the holders of a majority of the outstanding shares of Series B Preferred Stock~~validly issued, ~~at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000)~~ fully paid and nonassessable shares of Common Stock ~~subject~~ (xor Other Securities) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as followsequal to: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective.an amount equal to: (iia) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior an amount equal to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock ~~outstanding on~~ (or Other Securities) determined as provided in Sections 2 and 3 hereof which such ~~date and~~ holder would be entitled to receive upon exercise of this Warrant for the number of shares of Common Stock designated in such conversion notice multiplied by (y) the [for Parent Warrants: Current Market Price (or, if such shares are converted in connection with a Company Sale (as defined in the Purchase Agreement), the Market Price)] [for Subsidiary Warrants and IPO Valuation Warrants: Market Price] on the date of conversion of each such share of Common Stock (or such Other Securities) so receivable upon such exercise minus (b) an amount equal to (x) the number of shares of Common Stock ~~which~~ (without giving effect to any adjustment thereof) designated in such conversion notice multiplied by (y) the ~~aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion~~ Initial Warrant Price ~~of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause~~ divided by (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration [for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Parent Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be : such Current Market Price ~~per share of Common Stock for the period of 20 Trading Days preceding~~ (or, if such ~~record date, less the Fair Market Value~~ shares are converted in connection with a Company Sale (as defined in ~~Article IX) per~~ the Purchase Agreement), the Market Price)][for Subsidiary Warrants and IPO Valuation Warrants: such Market Price] of each such share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffOther Securities). (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Warrant Agreement (Riverstone Networks Inc), Warrant Agreement (Cabletron Systems Inc)

Conversion. ~~The holders~~ Upon the occurrence of ~~the Series B Preferred Stock~~ certain triggering events specified in any applicable indenture supplemental hereto with respect to a series of Convertible Securities (which may include, but shall ~~have conversion rights as follows: A. Each share of Series B Preferred Stock shall~~ not be ~~convertible at the direction of~~limited to, ~~and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~regulatory events or capital events), at any ~~time, at~~ time while the ~~office~~ Convertible Securities of ~~the Corporation or any transfer agent for~~ such ~~Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted~~series are outstanding, the ~~"conversion ratio") and (y) (prior to the consummation~~ Convertible Securities of ~~the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon~~ such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1"series shall, subject to ~~adjustment~~ and as provided in ~~paragraph VIII.G. B. If~~ this Section 3.12 and in such indenture supplemental hereto, be redeemed, in whole but not in part, and settled by the ~~holders~~ delivery of new fully paid ordinary shares or American depositary shares, as specified in such indenture supplemental hereto, to a ~~majority~~ reputable independent financial institution, trust company or similar entity to be appointed by the Company in such indenture supplemental hereto (the “Settlement Shares Depository”) on behalf of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price Holders of such Convertible Securities on the date specified therefor in such indenture supplemental hereto. Receipt by the Settlement Shares Depository of the ordinary shares or, if so ~~issued~~provided in an applicable indenture supplemental hereto, ~~would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii)~~ American depositary shares, shall be ~~made on the next Business Day following the date on which any such issuance is made~~ a good and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum complete discharge of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment Company’s obligations in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion respect of such Convertible Securities and those of the ~~consideration received therefor was~~ Guarantor under the ~~consideration actually received by~~ Guarantee thereof. Pursuant to Section 2.03, one or more indentures supplemental hereto with respect to a series of Convertible Securities will specify the ~~Corporation~~ circumstances giving rise to any triggering events, the price at which the Convertible Securities of such series may convert (including any adjustments thereto), the manner of calculation of the record date for purposes of conversion, the place or places where the Registered Securities of such series may be surrendered for conversion and details of the arrangement for the ~~issue~~ settlement of the conversion, including whether or not there is to be a sale of the ordinary shares or American depositary shares, as applicable). Following the occurrence of a triggering event but prior to the delivery of ordinary shares or American depositary shares (as applicable) to the Settlement Shares Depository, Holders of such Convertible Securities ~~(whether or not exercised or converted) plus~~ shall have recourse only to the ~~consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare~~Company or, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with ~~generally accepted accounting principles~~and under the provisions of the Guarantee of such Convertible Securities, ~~during~~ to the ~~period~~ Guarantor, for the issue and delivery of ordinary shares or American depositary shares (~~treated~~ as ~~one accounting period~~applicable) ~~commencing on July 1~~to the Settlement Shares Depository. After such delivery to the Settlement Shares Depository, ~~1998~~Holders of such Convertible Securities shall have recourse only to the Settlement Shares Depository for the delivery to them of such ordinary shares or American depositary shares, ~~and ending on~~ as applicable. Upon conversion, the Company shall, or shall ensure that the Guarantor shall, pay to the Holders of such Convertible Securities any interest accrued up to (but excluding) the date ~~such dividend is paid or (B) dividends or distributions~~ of ~~shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the~~ conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of ~~one share of Common Stock for the period of 20 Trading Days preceding~~ such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffConvertible Securities. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Indenture (Credit Suisse Group (Guernsey) III LTD), Indenture (Credit Suisse Group (Guernsey) III LTD)

Conversion. ~~The holders~~ 4.1 If the Merger Agreement is terminated, then, following such termination, each share of ~~the~~ Series B E Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding automatically convert into [__________] shares of ~~Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand~~ Class A Stock (~~1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment~~ as adjusted from time to time ~~as provided below (as so adjusted~~to appropriately reflect the effect of any stock splits, reverse splits, stock dividends, combinations and other similar events affecting the "shares of Class A Stock and occurring after the date of issuance of the Series E Preferred Stock). 4.2 On the effective date of the conversion ~~ratio") and (y) (prior~~ of the Series E Preferred Stock pursuant to Section 4.1, all rights with respect to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B E Preferred Stock ~~shall be on a pro rata basis amongst all holders~~ so converted, including the rights, if any, to receive notices, will terminate, except the rights of ~~Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "~~Holders thereof to (1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or ) receive certificates for the number of shares of ~~Common~~ Class A Stock to into which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of ~~Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of~~ Series B E Preferred Stock ~~shall be made without charge for any issue, stamp or other similar tax in respect~~ have been converted; and (2) exercise the rights to which they are entitled as Holders of ~~such issuance~~Class A Stock. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation 4.3 The Issuer shall at all times reserve and keep available ~~out~~ for issuance upon the conversion of the Series E Preferred Stock, free from preemptive rights, such number of its authorized but unissued shares of ~~Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common~~ Class A Stock as ~~shall~~ will from time to time be sufficient to ~~effect~~ permit the conversion of all outstanding shares of Series B E Preferred Stock, and shall take all action required to increase the authorized number of shares of each class of Class A Stock if at any time ~~the number of~~ there shall be insufficient authorized ~~but~~ unissued shares of ~~Common~~ Class A Stock ~~shall not be sufficient~~ to ~~effect~~ permit such reservation or to permit the conversion of all ~~then~~ outstanding shares of Series B E Preferred Stock~~, then in addition~~ . 4.4 If any shares of Class A Stock that would be issuable upon conversion pursuant to this Section 4 require registration with or approval of any Governmental Authority before such ~~other remedies as shall~~ shares may be ~~availableto the holder of Series B Preferred Stock~~issued upon conversion, the ~~Corporation~~ Issuer will ~~take~~ as expeditiously as possible cause such ~~corporate action~~ shares to be duly registered or approved, as ~~may, in~~ the ~~opinion of its counsel, be necessary~~ case may be. The Issuer will use commercially reasonable efforts to ~~increase its authorized but unissued~~ list the shares of ~~Common~~ Class A Stock ~~to such number of shares as shall be sufficient for such purposes. F. Any notice~~ required ~~by the provisions of paragraph D~~ to be ~~given the holders~~ delivered upon conversion of shares of Series B E Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, delivery upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares principal national securities exchange or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional considerationassociation, if any, ~~payable to the Corporation~~ upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, which the outstanding ~~shares of Common~~ Class A Stock ~~requiring an adjustment in~~ is listed at the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion time of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversiondelivery. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Agreement and Plan of Restructuring and Merger (Liberty Media Corp /De/), Agreement and Plan of Restructuring and Merger (Unitedglobalcom Inc)

Conversion. ~~The holders~~ (a) Following (i) effectiveness of ~~the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice~~ an amendment to the ~~Corporation from,~~ Certificate of Formation to increase the ~~holders~~ number of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable authorized shares of Common Stock ~~subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio")~~ by at least 50,000,000 shares and (yii) ~~(prior to~~ approval by the ~~consummation~~ shareholders of the ~~Recapitalization) to limitations resulting from~~ Corporation, in accordance with applicable law and the ~~available number~~ applicable rules and regulations of ~~shares of~~ the principal national securities exchange on which the Common Stock ~~which may be reserved~~ is then listed for ~~issuance upon such conversion~~trading (the “National Securities Exchange”), ~~provided ,that any conversion pursuant to this paragraph A of less than all~~ of the ~~outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation~~ issuance of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to ~~which such holder~~ be issued upon conversion of the Preferred Stock pursuant to this Section 8 (the “Conversion Requirements”), each share of Series A Preferred Stock shall automatically convert into 10 shares of Common Stock (the “Conversion Ratio”). (b) Any Common Stock delivered as a result of conversion pursuant to this Section 8 following satisfaction of the Conversion Requirements shall be ~~entitled as aforesaid~~validly issued, fully paid and non- assessable, free and clear of any preemptive right, liens, claims, rights or encumbrances other than those arising under the Code or the Bylaws of the Corporation. ~~Such conversion~~ Immediately following the settlement of conversion, the rights of the holders of converted Series A Preferred Stock shall ~~be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice~~ cease and the ~~person or~~ persons entitled to receive ~~the~~ shares of Common Stock ~~issuable~~ upon ~~such~~ the conversion of shares of Series A Preferred Stock shall be treated for all purposes as having become the ~~recordholder or holders~~ owners of such shares of Common Stock. Concurrently with such conversion, the converted shares of Series A Preferred Stock as shall cease to be outstanding, shall be canceled and the shares of Series A Preferred Stock formerly designated pursuant to this Statement of Resolution shall be restored to authorized but unissued shares of Preferred Stock. (c) If, after the Original Issue Date, the Corporation (i) makes a distribution on its Common Stock in cash, securities (including Common Stock) or other property or assets, (ii) subdivides or splits its outstanding Common Stock into a greater number of Common Stock, (iii) combines or reclassifies its Common Stock into a smaller number of Common Stock or (iv) issues by reclassification of its Common Stock any securities (including any reclassification in connection with a merger, consolidation or business combination in which the Corporation is the surviving person), then the Conversion Ratio in effect at the time of the record date for such distribution or of the effective date of such ~~date. The issuance~~ subdivision, split, combination, or reclassification shall be proportionately adjusted so that the conversion of ~~certificates~~ the Series A Preferred Stock after such time shall entitle the holder to receive the aggregate number of Common Stock (or shares of any securities into which such shares of Common Stock ~~upon conversion of shares of~~ would have been combined, consolidated, merged or reclassified pursuant to clauses (iii) and (iv) above) that such holder would have been entitled to receive if the Series B A Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of had been converted into Common Stock immediately prior to ~~be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time~~ such record date or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take placeeffective date, as the case may be, ~~provided that~~ and in the case of ~~any Transaction to~~ a merger, consolidation or business combination in which ~~paragraph H applies~~ the Corporation ~~shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify~~ is the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalizationsurviving person, the Corporation shall ~~at all times reserve and keep available out~~ provide effective provisions to ensure that the provisions in this Statement of ~~its authorized but unissued shares of Common Stock, solely for~~ Resolution relating to the ~~purpose of effecting the conversion of the shares of~~ Series B A Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be ~~sufficient to effect~~ abridged or amended and that the ~~conversion of all then outstanding shares of~~ Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B A Preferred Stock shall ~~be deemed given if sent by facsimile transmission~~thereafter retain the same powers, ~~by telex~~preferences and relative participating, ~~or if deposited in the United States mail, postage prepaid~~optional and other special rights, and ~~addressed to each holder of record at his~~the qualifications, ~~her or its address appearing on~~ limitations and restrictions thereon, that the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Series A Preferred Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect had immediately prior to such ~~event~~ transaction or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlierevent. An adjustment made pursuant to this ~~clause (i~~Section 8(c) shall become effective ~~(x)~~ immediately after the record date in the case of ~~any such dividend or distribution,~~ a distribution and shall become effective immediately after the ~~close of business on the record~~ effective date ~~for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y)~~ in the case of ~~any such~~ a subdivision, ~~reclassification or~~ combination, at reclassification (including any reclassification in connection with a merger, consolidation or business combination in which the ~~close~~ Corporation is the surviving person) or split. Such adjustment shall be made successively whenever any event described above shall occur. (d) Notwithstanding any of ~~business~~ the other provisions of this Section 8, no adjustment shall be made to the Conversion Ratio pursuant to Section 8(c) as a result of any of the following: (i) the grant of Common Stock or options, warrants or rights to purchase Common Stock to employees, officers or directors of the Corporation or its subsidiaries, under compensation plans and agreements approved in good faith by the Board; provided, that in the case of options, warrants or rights to purchase Common Stock, the exercise price per Common Stock shall not be less than the closing price of the Common Stock (as reported by the National Securities Exchange) on the ~~day upon which~~ date such ~~corporate action becomes effective.~~option, warrant or other right is issued; (ii) In the ~~case~~ issuance of any Common Stock as all or part of the consideration to effect (A) the closing of any acquisition by the Corporation ~~shall~~of assets of a third party or (B) the consummation of a merger, ~~after~~ consolidation or other business combination of the ~~Issue Date, issue shares of~~ Corporation with another entity in which the Corporation survives and the Common Stock ~~at a price per share~~remain outstanding to the extent such transaction(s) is or are validly approved by the vote or consent of the Board; (iii) without duplication of Section 8(d)(i) above, the issuance of options, warrants or other rights to purchase Common Stock, or securities exercisable or convertible into or exchangeable for ~~shares of~~ Common Stock (~~"Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (~~or options, warrants or other rights to purchase any such securities that are exercisable or convertible into or exchangeable for ~~a period of 15 consecutive trading days prior to such date)~~Common Stock, ~~then, and~~ in each ~~such~~ case, ~~the conversion ratio shall be adjusted so~~ that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock are outstanding on the date ~~on which such~~ of first issuance of shares ~~or Convertible Securities are issued and~~ of Series A Preferred Stock); and (2iv) the ~~number~~ issuance of ~~additional shares~~ securities for which an adjustment is made under another provision of this Section 8. (e) The Corporation shall pay any and all issue, documentary, stamp and other taxes, excluding any income, franchise, property or similar taxes, that may be payable in respect of any issue or delivery of Common Stock ~~issued~~on conversion of Series A Preferred Stock pursuant hereto. However, ~~or into which~~ the ~~Convertible Securities may convert, and the denominator~~ holder of ~~which~~ any Series A Preferred Stock shall pay any tax that is due because Common Stock issuable upon conversion thereof are issued in a name other than such holder’s name. (f) No fractional Common Stock shall be issued upon the ~~sum~~ conversion of ~~(x) the number of shares of~~ any Series A Preferred Stock. All Common Stock ~~outstanding on such date and~~ (yincluding fractions thereof) ~~the number~~ issuable upon conversion of ~~shares~~ more than one share of ~~Common~~ Series A Preferred Stock ~~which the aggregate consideration receivable~~ by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) a holder thereof shall be ~~made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For~~ aggregated for purposes of ~~this clause (ii),~~ determining whether the ~~aggregate consideration receivable by the Corporation~~ conversion would result in ~~connection with~~ the issuance of any ~~securities shall be deemed to be~~ fractional stock. If, after the ~~sum of~~ aforementioned aggregation, the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) conversion would result in the issuance of ~~any shares~~ a fraction of a Common Stock, the Corporation shall not issue a fractional Common Stock but shall round the fractional Common Stock to the nearest whole Common Stock (~~whether treasury shares or newly issued shares) pursuant to~~ and a ~~dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares~~ 0.5 of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock ~~for the period of 20 Trading Days preceding such record date, and the denominator of which~~ shall be ~~such Current Market Price per~~ rounded up to the next higher share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off). (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Purchase Agreement (Contango Oil & Gas Co), Purchase Agreement

Conversion. ~~The holders~~ In lieu of ~~the Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ exercising this Warrant or any portion of ~~Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~this Warrant, at any ~~time~~time the Holder of this Warrant shall have the right to convert this Warrant or any portion of this Warrant into Warrant Stock by the surrender of this Warrant, together with the written Notice of Conversion and Investment Representation Statement in the forms attached hereto as Attachments 3 and 2, respectively, duly completed and executed, and containing a form of signature guarantee reasonably acceptable to the Company, at the principal office of the ~~Corporation or any transfer agent for such Series~~Company, ~~into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted,~~ specifying the ~~"conversion ratio") and (y) (prior to the consummation~~ portion of the ~~Recapitalization)~~ Warrant to ~~limitations resulting from the available~~ be converted. The number of shares of ~~Common~~ Warrant Stock ~~which may~~ to be ~~reserved for issuance~~ issued to the Holder upon such ~~conversion, provided ,that any~~ conversion ~~pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock~~ shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of~~ computed using the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for following formula: X=(P)(Y)(A-B)/A where X = the number of ~~shares~~ Common Shares to be issued to the Holder for the portion of the Warrant being converted. P = the portion of the Warrant being converted expressed as a decimal fraction. Y = the total number of Common Shares issuable upon exercise of the Warrant in full. A = the fair market value of one share of Warrant Stock which means the fair market value of the Warrant Stock as of the last Business Day immediately prior to ~~which~~ the date the Notice of Conversion is received by the Company, as reported in the principal market for such ~~holder~~ securities or, if no such market exists, as determined in good faith by the Company’s Board. B = the Warrant Price on the date of conversion. Any portion of this Warrant that is converted shall be ~~entitled as aforesaid~~immediately canceled. ~~Such conversion~~ This Warrant or any portion of this Warrant shall be deemed to have been ~~made~~ converted immediately prior to the close of business on the date of ~~such Conversion Notice~~ its surrender for conversion as provided above, and the ~~person or persons~~ Person entitled to receive the shares of ~~Common~~ Warrant Stock issuable upon such conversion shall be treated for all purposes as the ~~recordholder or holders~~ holder of such shares of ~~Common Stock~~ record as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties)As promptly as practicable after such date, and ~~the "Conversion Price"~~ in any event within three Business Days of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, ~~exchange~~ the Company shall issue and deliver to the Person or ~~exercise~~ Persons entitled to receive the same a certificate or certificates for the number of ~~any such Convertible Securities. Neither (A) the issuance of any~~ full shares of ~~Common~~ Warrant Stock ~~(whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of,~~ issuable upon such conversion. If the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto Warrant shall be ~~deemed to constitute an issuance of Common Stock or Convertible Securities by~~ converted for less than the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the total number of shares of ~~Common~~ Warrant Stock ~~determined by multiplying (1)~~ then issuable upon conversion, promptly after surrender of the ~~applicable conversion ratio on~~ Warrant upon such conversion, the ~~day immediately prior~~ Company will execute and deliver a new warrant, dated the date of this Warrant, evidencing the right of the Holder to the ~~record date fixed for~~ balance of the ~~determination~~ Warrant Stock purchasable hereunder upon the same terms and conditions set forth in this Warrant. If this Warrant is converted, as a whole or in part, after the occurrence of ~~stockholders entitled~~ an event as to ~~receive such dividend or distribution by (2~~which Section 3(c) ~~a fraction~~is applicable, the ~~numerator of which~~ Holder shall be receive the ~~then Current Market Price per share~~ consideration contemplated by Section 3(c) in lieu of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffShares. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Purchase Agreement (Distributed Energy Systems Corp), Securities Purchase Agreement (Distributed Energy Systems Corp)

Conversion. ~~The holders~~ (a) At the option and election of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each~~ holder thereof, each share ~~of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares~~ of Series B Preferred Stock, ~~at any time~~including all unpaid dividends accumulated thereon to the Conversion Date (as defined below), at whether or not such dividends have been declared, may be converted in the ~~office~~ manner provided herein, into (i) fully paid, duly authorized and nonassessable shares of Series C Junior Participating Preferred Stock, without par value, of the Corporation or (the "Junior Preferred Stock"), on any ~~transfer agent for such Series~~Conversion Date occurring prior to the Approval Date, ~~into one thousand~~ and (~~1,000~~ii) fully paid and nonassessable shares of Common ~~Stock~~ Stock, on any Conversion Date occurring on or after the Approval Date. As of the Conversion Date with respect to a share of Series B Preferred Stock, subject to subsections (~~x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio"~~d) and (ye) of this Section A, such share shall be converted into that number of Conversion Shares (~~prior~~ as defined below) equal to the ~~consummation~~ quotient of (i) the ~~Recapitalization~~sum of (A) the Stated Value thereof plus (B) all unpaid dividends accumulated on such share of Series B Preferred Stock to ~~limitations resulting from~~ the ~~available number~~ Conversion Date whether or not such dividends have been declared, divided by (ii) the Conversion Price in effect on the Conversion Date. (b) Conversion of shares of ~~Common~~ the Series B Preferred Stock ~~which~~ may be ~~reserved for issuance~~ effected by any holder thereof upon the surrender to the Corporation at the principal office of the Corporation or at the office of any agent or agents of the Corporation, as may be designated by the Board of Directors of the Corporation and identified to the holders in writing upon such ~~conversion~~designation, ~~provided ,that any conversion pursuant to this paragraph A of less than all~~ of the ~~outstanding~~ certificate for such shares of Series B Preferred Stock to be converted accompanied by a written notice stating that such holder elects to convert all or a specified whole number of shares represented by such certificate in accordance with the provisions of this Section A and specifying the name or names in which such holder wishes the certificate or certificates for Conversion Shares to be issued. In case such notice shall specify a name or names other than that of such holder, such notice shall be accompanied by payment of all transfer taxes payable upon the issuance of Conversion Shares in such name or names. Other than such taxes, the Corporation will pay any and all issue and other taxes (other than taxes based on ~~a pro rata basis amongst all holders~~ income) that may be payable in respect of any issue or delivery of Conversion Shares on conversion of Series B Preferred ~~Stock~~Stock pursuant hereto. ~~After consummation of~~ As promptly as practical, and in any event within three Business Days after the ~~Recapitalization~~Conversion Date, the ~~number "1,000" in this paragraph~~ Corporation shall deliver or cause to be ~~"1", subject to adjustment~~ delivered as ~~provided in paragraph VIII.G. B. If~~ directed by the ~~holders~~ holder of ~~a majority of the outstanding~~ shares of Series B Preferred Stock ~~give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock~~ being converted (~~a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or~~ i) certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for representing the number of ~~shares of Common Stock~~ validly issued, fully paid and nonassessable full Conversion Shares to which such holder shall be entitled ~~as aforesaid~~to, (ii) any cash that is required to be paid pursuant to subsections (d) and (e) of this Section A, and (iii) if less than the full number of shares of Series B Preferred Stock evidenced by the surrendered certificate or certificates is being converted, a new certificate or certificates, of like tenor, for the number of shares of Series B Preferred Stock evidenced by such surrendered certificate or certificates less the number of shares of Series B Preferred Stock being converted. Such conversion shall be deemed to have ~~been made immediately prior to~~ occurred at the close of business on the date (the "Conversion Date") of the giving of such notice by the holder of the Series B Preferred Stock to be converted and of such surrender of the certificate or certificates representing the shares of Series B Preferred Stock to be converted so that as of such time the rights of the holder thereof as to the shares being converted shall cease except for the right to receive Conversion ~~Notice~~ Shares and/or cash in accordance herewith, and the person ~~or persons~~ entitled to receive the ~~shares~~ Conversion Shares issued as a result of ~~Common Stock issuable upon~~ such conversion shall be treated for all purposes as having become the ~~recordholder or holders~~ holder of such Conversion Shares at such time. (c) In the event that the Series B Preferred Stock is to be redeemed or repurchased pursuant to Article V hereof, from and after the Redemption Date or the applicable repurchase date, the right of a holder to convert shares of ~~Common~~ Series B Preferred Stock as pursuant to this Section A shall cease and terminate, except if the Corporation shall default in payment of the Redemption Price on the Redemption Date or the repurchase price on the applicable repurchase date, in which case all such ~~date~~rights shall continue unless and until such shares are redeemed or repurchased and such redemption or repurchase price is paid in full in accordance with the terms hereof. ~~The issuance of certificates or~~ Notwithstanding anything in the foregoing to the contrary, if the Conversion Date shall occur with respect to any shares of ~~Common~~ Series B Preferred Stock ~~upon conversion of~~ on or prior to any Redemption Date or repurchase date, such shares of Series B Preferred Stock shall be ~~made without charge for any issue, stamp or other similar tax~~ converted by the Corporation into Conversion Shares in ~~respect of such issuance.~~the manner provided in this Section A. ~~C. No fractional shares shall be issued upon~~ (d) In connection with the conversion of any shares of Series B Preferred ~~Stock and~~ Stock, no fractions of Conversion Shares shall be issued, but in lieu thereof the ~~number~~ Corporation shall pay a cash adjustment in respect of ~~shares~~ such fractional interest in an amount equal to such fractional interest multiplied by the Closing Price per share of Common Stock ~~to be issued shall be rounded down to~~ on the ~~nearest whole share~~Conversion Date (or on the Trading Day immediately preceding the Conversion Date, ~~and~~ if the ~~holder~~ Conversion Date is not a Trading Day). If more than one share of Series B Preferred Stock shall be ~~paid in cash~~ surrendered for ~~any fractional share. D. In case at any time or from time to time~~ conversion by the ~~Corporation~~ same holder on the same Conversion Date, the number of full Conversion Shares issuable on conversion thereof shall ~~pay any dividend or make any other distribution to~~ be computed on the ~~holders~~ basis of ~~its Common Stock or other class~~ the total number of ~~securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional~~ shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so ~~taken~~surrendered. ~~E. From and after the Recapitalization, the~~ (e) The Corporation shall at all times reserve and keep available ~~out~~ for issuance upon the conversion of the Series B Preferred Stock in accordance with the terms hereof, such number of its authorized but unissued shares of ~~Common Stock, solely for the purpose of effecting the conversion of the shares of Series B~~ Junior Preferred ~~Stock, such number of its shares of~~ Stock and Common Stock as ~~shall~~ will from time to time be sufficient to ~~effect~~ permit the conversion of all outstanding shares of Series B Preferred Stock, and ~~if at any time~~ shall take all action required to increase the authorized number of ~~authorized but unissued~~ shares of Junior Preferred Stock or Common Stock ~~shall not be sufficient~~ if necessary to ~~effect~~ permit the conversion of all ~~then~~ outstanding shares of Series B Preferred Stock, ~~then in addition to such other remedies as shall be availableto~~ except that from and after the ~~holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued~~ Approval Date no shares of ~~Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B~~ Junior Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed required to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionso reserved. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Investment Agreement (TPG Advisors Ii Inc), Investment Agreement (TPG Advisors Ii Inc)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (i) Each share of ~~Series~~ Class B ~~Preferred~~ Common Stock shall be ~~convertible~~ converted at such time, in such manner and upon such terms and conditions as provided herein into one fully paid and non-assessable share of Class A Common Stock. (ii) Each share of Class B Common Stock shall automatically convert into a share of Class A Common Stock upon the ~~direction of, and by notice~~ earlier to ~~the Corporation from,~~ occur of (i) the holders of ~~a majority~~ all Class B Common Stock ceasing to own in the aggregate 15% of the issued and outstanding Common Stock, and (ii) as provided in Article 4, Paragraph 2C.(3)(d). Upon automatic conversion of shares of ~~Series~~ Class B ~~Preferred~~ Common Stock, the corporation shall reflect such conversion, and the issuance of Class A Common Stock in connection therewith on its books and records for all purposes even if certificates reflecting such converted shares of Class B Common Stock are not surrendered to the corporation or its transfer agent. All shares of Class B Common Stock, upon conversion thereof into Class A Common Stock, shall retain their designation as Class B Common Stock and shall have the status of authorized and unissued shares of Class B Common Stock; provided that if all shares of Class B Common Stock outstanding are converted into shares of Class A Common Stock, then all authorized but unissued shares or treasury shares of Class B Common Stock shall automatically convert into authorized but unissued or treasury shares of Class A Common Stock, as the case may be, and no further shares of Class B Common Stock shall exist. Except as specifically contemplated under this Article 4, Paragraph 2C.(3)(e), shares of Class B Common Stock may not be converted into Class A Common Stock. (iii) Each share of Class A Common Stock owned (within the meaning of Article 4, Paragraph 2C.(3)(d)) by Chevron U.S.A. Inc., a Pennsylvania 6 89 corporation ("Chevron") or its Affiliates shall simultaneous with acquiring such ownership automatically be converted into one fully paid and non-assessable share of Class B Common Stock; provided, however, that for purposes of any shares of Class B Common Stock so issued, only Chevron will be deemed to be the Original Holder thereof for purposes of the provisions of Article 4, Paragraph 2C.(3)(d), and provided, further, that this provision shall not apply with respect to shares of Class A Common Stock issued upon conversion of all Class B Common Stock in accordance with the first sentence of Article 4, Paragraph 2C.(3)(e)(ii)(i), or any shares of Class A Common Stock owned by Chevron or its Affiliates, after such conversion shall have occurred. Upon automatic conversion of shares of Class A Common Stock, the corporation shall reflect such conversion and the issuance of Class B Common Stock in connection therewith on its books and records for all purposes even if certificates reflecting such converted shares of Class A Common Stock are not surrendered to the corporation for transfer. All shares of Class B Common Stock shall be subject to the restrictions and provisions contained in the corporation's Articles of Incorporation. All shares of Class A Common Stock, upon conversion thereof into Class B Common Stock, shall retain their designation as Class A Common Stock and shall have the status of authorized and unissued shares of Class A Common Stock. (iv) Nothing herein shall prevent the Original Holder (or any Permitted Transferee) of the Class B Common Stock and the corporation from executing an agreement allowing the Original Holder (or any Permitted Transferee), at its option, to convert the Class B Common Stock into Class A Common Stock, nor the conversion of any ~~time~~Class B Common Stock pursuant to such agreement. (v) The corporation will, as soon as practicable after such deposit of a certificate or certificates for Common Stock to be converted in accordance with this Article 4, Paragraph 2C.(3)(e), issue and deliver at the office of the ~~Corporation~~ corporation or ~~any~~ of its transfer agent to the person for whose account such ~~Series, into one thousand (1,000) fully paid and nonassessable shares of~~ Common Stock ~~subject (x) to adjustment from time to time as provided below (as~~ was so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holdersurrendered, a certificate or certificates for the number of full shares of Common Stock to into which ~~such holder shall be entitled as aforesaid~~the shares represented by the surrendered certificate are converted. ~~Such conversion shall be deemed to have been made immediately prior~~ If surrendered certificates for Common Stock are converted only in part, the corporation will issue and deliver to the ~~close~~ holder, without charge therefor, a new certificate or certificates representing the aggregate of ~~business on~~ the ~~date~~ unconverted shares of such ~~Conversion Notice and~~ class of Common Stock. The failure of the ~~person or persons entitled~~ holder to ~~receive~~ deliver to the corporation certificates representing shares of a class of Common Stock ~~issuable upon such~~ converted in accordance with this Article 4, Paragraph 2C.(3)(e), shall in no way affect the automatic conversion ~~shall be treated for all purposes as the recordholder or holders~~ of such ~~shares of Common Stock as of such date.~~ shares. (vi) The issuance of certificates or for shares of a class of Common Stock upon conversion of shares of ~~Series B Preferred~~ the other class of Common Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance~~. C. No fractional shares shall~~ ; provided, however, if any such certificate is to be issued ~~upon conversion~~ in a name other than that of ~~any~~ the holder of the share or shares of ~~Series B Preferred Stock and~~ the ~~number of shares~~ class of Common Stock ~~to be issued~~ converted, the person or persons requesting the issuance thereof shall ~~be rounded down~~ pay to the ~~nearest whole share, and~~ corporation the ~~holder~~ amount of ~~Series B Preferred Stock~~ any tax which may be payable in respect of any transfer 7 90 involved in such issuance or shall ~~be paid in cash for any fractional share~~establish to the satisfaction of the corporation that such tax has been paid. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another (vii) The corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep ~~available out of its authorized but unissued shares of Common Stock~~available, solely for the purpose of ~~effecting the~~ issuance upon conversion of the outstanding shares of ~~Series~~ Class B ~~Preferred~~ Common Stock, such number of ~~its~~ shares of Class A Common Stock as shall be issuable upon the conversion of all such outstanding shares, provided that nothing contained herein shall be construed to preclude the corporation from satisfying the obligations in respect of the conversion of the outstanding shares of Class B Common Stock by delivery of shares of Class A Common Stock which are held in the treasury of the corporation. The corporation shall take all such corporate and other actions as from time to time may be ~~sufficient~~ necessary to ~~effect~~ insure that all shares of Class A Common Stock issuable upon conversion of shares of Class B Common Stock upon issue will be duly and validly authorized and issued, fully paid and nonassessable and free of any preemptive or similar rights. In order that the corporation may issue shares of Class A Common Stock upon conversion of the Class B Common Stock, the corporation will endeavor to comply with all applicable Federal and state securities laws and will endeavor to list such shares to be issued upon conversion on such securities exchange on which the Class A Common Stock is then listed. (viii) The corporation shall at all times reserve and keep available, solely for the purpose of issuance upon conversion of the outstanding shares of Class A Common Stock a number of shares of Class B Common Stock equal to 40% of the number of outstanding shares of Class A Common Stock, provided that nothing contained herein shall be construed to preclude the corporation from satisfying the obligations in respect of the conversion of ~~all~~ the outstanding shares of ~~Series B Preferred Stock, and if at any time the number of authorized but unissued shares of~~ Class A Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by ~~the provisions of paragraph D to be given the holders~~ delivery of shares of ~~Series~~ Class B ~~Preferred~~ Common Stock ~~shall be deemed given if sent by facsimile transmission, by telex, or if deposited~~ which are held in the ~~United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books~~ treasury of the ~~Corporation. G.~~ corporation. The ~~conversion ratio~~ corporation shall ~~be subject to adjustment~~ take all such corporate and other actions as from time to time ~~as follows: (i) In case the Corporation shall at any time or from time~~ may be necessary to ~~time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding~~ insure that all shares of Class B Common Stock ~~in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number~~ issuable upon conversion of shares of ~~Common Stock, (C) combine the outstanding shares of~~ Class A Common Stock ~~into a smaller number~~ upon issue will be duly and validly authorized and issued, fully paid and nonassessable and free of ~~shares~~ any preemptive or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so similar rights. In order that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, corporation may issue shares of Class B Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the upon conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Class A Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off corporation will endeavor to comply with all applicable Federal and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offstate securities laws. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Merger Agreement (Dynegy Inc), Merger Agreement (Illinova Corp)

Conversion. ~~The holders~~ (i) Subject to the provisions of ~~the~~ this paragraph 8, (A) a holder of shares of Series B A Preferred Stock shall have ~~conversion rights as follows: A. Each share~~ the right, on or after the date which is 30 days after the First Call Date (or, in the event that a Change of ~~Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~Control has occurred, at any time), at such holder's option, to convert any or all outstanding shares (and fractional shares) of Series A Preferred Stock held by such holder, in whole or in part, into fully paid and non-assessable shares of Common Stock. (ii) The number of shares of Common Stock deliverable upon conversion of a share of Series A Preferred Stock (including the Additional Shares), subject to adjustment as hereinafter provided, shall be 1.0 (the CONVERSION RATIO). In the event that at the time of conversion of a share of Series A Preferred Stock there are accrued and unpaid dividends on such share with respect to which Additional Shares have not been issued (including, with respect to any interim period since the last Dividend Payment Date, the product of the full dividend payable for the current Dividend Period ending on the next Dividend Payment Date, multiplied by a fraction, the numerator of which is the number of days that have elapsed since the last Dividend Payment Date and the denominator of which is 360), then, upon such conversion, the holder thereof shall be entitled to receive such number of shares of Common Stock (in addition to the shares of Common Stock otherwise issuable upon the conversion of any such shares of Series A Preferred Stock and Additional Shares converted therewith) as would have been issued in accordance with the preceding sentence if Additional Shares had been issued in respect of such accrued and unpaid dividends and had been converted simultaneously therewith. (i) In connection with any Conversion pursuant to this paragraph 8, the holder of the shares of Series A Preferred Stock to be converted shall surrender the certificates representing such shares at the office of the Corporation with a written notice (a CONVERSION NOTICE) of election to convert completed and signed, specifying the number of shares to be converted. Unless the shares issuable on conversion are to be issued in the same name as the name in which such shares of Series A Preferred Stock are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder or the holder's duly authorized attorney, and an amount sufficient to pay any transfer ~~agent~~ or similar tax. (ii) As promptly as practicable after the surrender by a holder of certificates for ~~such Series, into one thousand (1,000) fully paid and nonassessable~~ shares of ~~Common~~ Series A Preferred Stock ~~subject (x) to adjustment from time to time as provided below (as so adjusted~~under paragraph 8(b)(i), the ~~"conversion ratio")~~ Corporation shall issue and ~~(y) (prior~~ shall deliver to such holder, or on the holder's written order to the ~~consummation of~~ holder's transferee, (w) a certificate or certificates for the ~~Recapitalization) to limitations resulting from the available~~ whole number of shares of Common Stock ~~which may be reserved for issuance~~ issuable upon the conversion of such ~~conversion~~shares in accordance with the provisions of this paragraph 8, ~~provided ,that~~ (x) any ~~conversion~~ cash adjustment required pursuant to ~~this~~ paragraph ~~A of less than all of~~ 8(f) and (y) in the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders event of a ~~majority of the outstanding shares of Series B Preferred Stock give notice of~~ conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holderpart, a certificate or certificates for the whole number of ~~shares of Common~~ Series A Preferred Stock ~~to which such holder shall be entitled as aforesaid. Such~~ not being so converted. (iii) Each conversion shall be deemed to have been ~~made~~ effected (the EFFECTIVE TIME) immediately prior to the close of business on the date of ~~such~~ delivery of the Conversion ~~Notice and~~ Notice. At the ~~person~~ Effective Time, the Person in whose name or ~~persons entitled to receive the~~ names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be ~~treated for all purposes as~~ deemed to have become the ~~recordholder or holders~~ holder of ~~such~~ record of the shares of Common Stock as represented thereby at such time on such date and such conversion shall be into a number of ~~such date. The issuance of certificates or~~ whole shares of Common Stock ~~upon conversion~~ in the aggregate equal to the product of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Series A Preferred Stock surrendered and the Conversion Ratio in effect at such time on such date. All shares of Common Stock delivered upon conversion of the Series A Preferred Stock will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights. At the Effective Time, the shares to be ~~issued~~ so converted shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall no longer be deemed to be outstanding and all rights of a holder with respect to such shares surrendered for conversion shall immediately terminate except the ~~time~~ right to receive the Common Stock and other amounts payable pursuant to this paragraph 8 and a certificate or certificates representing the shares of ~~giving thereof~~Series A Preferred Stock not converted. (i) Upon delivery to the ~~registered holders~~ Corporation of a Conversion Notice by a holder of shares of Series A Preferred Stock, the ~~Series B Preferred Stock at the addresses of each as shown on the books~~ right of the Corporation ~~maintained by the Transfer Agent thereof~~ to redeem such shares of ~~the date on which (i) the books~~ Series A Preferred Stock shall terminate, regardless of ~~the Corporation shall close or~~ whether a ~~record shall be taken for such stock dividend, distribution or subscription rights or~~ notice of redemption has been mailed pursuant to paragraph 7. (ii) ~~such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place,~~ Except as ~~the case may be,~~ provided ~~that~~ above and in ~~the case of any Transaction to which~~ paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization8(g), the Corporation shall make no payment or adjustment for accrued and unpaid dividends on shares of Series A Preferred Stock, whether or not in arrears, on conversion of such shares or for dividends in cash on the shares of Common Stock issued upon such conversion. (i) The Corporation covenants that it will at all times reserve and keep ~~available out~~ available, free from preemptive rights, such number of its authorized but unissued shares of Common ~~Stock, solely~~ Stock as shall be required for the purpose of effecting conversions of the Series A Preferred Stock. (ii) Prior to the delivery of any securities which the Corporation shall be obligated to deliver upon conversion of the ~~shares of~~ Series B A Preferred Stock, ~~such number~~ the Corporation shall comply with all applicable federal and state laws and regulations which require action to be taken by the Corporation. (e) The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of ~~its~~ the issue or delivery of shares of Common Stock as on conversion of the Series A Preferred Stock pursuant hereto; provided that the Corporation shall ~~from time~~ not be required to ~~time~~ pay any tax which may be ~~sufficient~~ payable in respect of any transfer involved in the issue or delivery of shares of Common Stock in a name other than that of the holder of the Series A Preferred Stock to ~~effect~~ be converted and no such issue or delivery shall be made unless and until the Person requesting such issue or delivery has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid. (f) In connection with the conversion by a holder of ~~all outstanding~~ any shares of Series B A Preferred Stock, ~~and if at any time the number~~ no fractions of ~~authorized but unissued~~ shares of Common Stock shall ~~not~~ be ~~sufficient~~ required to ~~effect~~ be issued to such holder, but in lieu thereof the ~~conversion~~ Corporation shall pay a cash adjustment in respect of ~~all then outstanding~~ such fractional interest in an amount equal to such fractional interest on the business day on which such shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B A Preferred Stock ~~shall be~~ are deemed ~~given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed~~ to ~~each holder of record at his, her or its address appearing on the books of the Corporation~~have been converted. ~~G. The conversion ratio shall be subject to adjustment from time to time as follows:~~ (i) In case the Corporation shall at any time ~~or from time to time~~ after the ~~Issue Date~~ date of issue of the Series A Preferred Stock (A) ~~pay~~ declare a dividend or make a ~~distribution,~~ distribution on ~~the outstanding shares of~~ Common Stock payable in ~~shares of~~ Common Stock, (B) subdivide or split the outstanding ~~shares of~~ Common Stock, (C) combine or reclassify the outstanding Common Stock into a ~~larger~~ smaller number of shares, (D) issue any shares of its Capital Stock in a reclassification of Common Stock (including any such reclassification in connection with a consolidation or merger in which the Corporation is the continuing corporation) or, (E) consolidate with, or merge with or into, any other Person, or engage in any reorganization, recapitalization, sale of all or substantially all of the Corporation's assets to any entity or any other transaction which, in the case of any of the transactions referred in this subclause (E), is effected in such a manner that the holders of Common Stock are entitled to receive stock, securities or assets with respect to or in exchange for Common Stock (any such transaction described in this subclause (E), an ORGANIC CHANGE), the Conversion Ratio in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision, split, combination, consolidation, merger, reclassification or Organic Change shall be proportionately adjusted, or other provision shall be made, so that the conversion of the Series A Preferred Stock after such time shall entitle the holder to receive the aggregate number of shares of Common Stock, or other securities of the Corporation (~~C) combine the outstanding~~ or shares of any security or cash or other property into which such shares of Common Stock have been combined, consolidated, merged, reclassified or changed, or which were otherwise receivable with respect to or in exchange for shares of Common Stock, pursuant to paragraph 8(g)(i)(C), 8(g)(i)(D) or 8(g)(i)(E) above) which, if the Series A Preferred Stock had been converted immediately prior to such time, such holder would have owned upon such conversion and been entitled to receive by virtue of such dividend, distribution, subdivision, split, combination, consolidation, merger, reclassification or Organic Change, assuming such holder of Common Stock of the Corporation (x) is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or in connection with which such reclassification or Organic Change was made, as the case may be (CONSTITUENT PERSON), or an affiliate of a ~~smaller number~~ Constituent Person and (y) failed to exercise any rights of ~~shares~~ election as to the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger or Organic Change (provided, that if the kind or amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger or Organic Change, is not the same for each share of Common Stock of the Corporation held immediately prior to such reclassification, change, consolidation, merger or Organic Change by other than a Constituent Person or an affiliate thereof and in respect of which such rights of election shall not have been exercised (NON-ELECTING share), then for the purpose of this paragraph 8(g) the kind and amount of securities, cash and other property receivable upon such reclassification, change, consolidation, merger or Organic Change by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). Such adjustment shall be made successively whenever any event listed above shall occur. (ii) In case the Corporation shall issue or sell any Common Stock (other than Common Stock issued (A) pursuant to the Corporation's existing or future stock option plans or pursuant to any other existing or future Common Stock-related director or employee compensation plan of the Corporation approved by the Board of Directors, (B) as consideration for the acquisition of a business or of assets, (C) in a firmly committed underwritten public offering, (D) ~~issue by reclassification~~ to the Corporation's joint venture partners in exchange for interests in the relevant joint venture, (E) upon conversion of ~~the~~ shares of any series of Preferred Stock or (F) upon exercise or conversion of any security the issuance of which caused an adjustment under paragraph 8(g)(i), 8(g)(iii) or 8(g)(iv) hereof or the issuance of which did not require adjustment hereunder) without consideration or for a consideration per share less than the 30 Day Market Price on the date of such issuance, or shall issue securities convertible into Common Stock (other than such securities paid as dividends on any ~~shares~~ class of ~~capital stock~~ Preferred Stock) having a conversion price per share less than the 30 Day Market Price at the date of ~~the Corporation, then, and in each~~ issuance of such ~~case~~convertible security, the ~~conversion ratio~~ Conversion Ratio to be in effect after such issuance or sale shall be determined by multiplying the Conversion Ratio in effect immediately prior to such ~~event~~ issuance or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined sale by ~~multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B)~~ a fraction, (1) the numerator of which shall be the sum of ~~(1)~~ the number of shares of Common Stock outstanding ~~on the date on which~~ immediately prior to such ~~shares~~ issuance or ~~Convertible Securities are issued~~ sale and ~~(2)~~ the number of additional shares of Common Stock ~~issued~~to be issued or sold (or, ~~or into which~~ in the ~~Convertible Securities may convert~~case of convertible securities, issued on conversion), and (2) the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on immediately prior to such ~~date~~ issuance or sale and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of additional shares of Common Stock so ~~issued,~~ issued or ~~the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued,~~ sold (or issuable on conversion) would purchase at ~~such Current~~ the 30 Day Market ~~price on such date. An adjustment made pursuant to this clause (ii) shall be made~~ Price in effect on the ~~next Business Day following the~~ date ~~on which any~~ of such issuance ~~is made and shall be effective retroactively immediately after~~ or sale. In case any portion of the ~~close of business on such date. For purposes of this clause (ii), the aggregate~~ consideration ~~receivable by the Corporation in connection with the issuance of any securities shall be deemed~~ to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation ~~for~~ shall be in a form other than cash, the ~~issue~~ fair market value of such ~~Convertible Securities (whether or not exercised or converted) plus~~ noncash consideration shall be utilized in the ~~consideration actually received~~ foregoing computation. Such fair market value shall be determined in good faith by the ~~Corporation upon such exercise~~ Board of ~~conversion~~Directors. (iii) In case the Corporation shall ~~at any time~~ fix a record date for the issuance of rights, options or ~~from time~~ warrants to ~~time after~~ the ~~Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution~~ holders of ~~stock~~ its Common Stock or other securities ~~or property or rights or warrants~~ entitling such holders to subscribe for or purchase shares of Common Stock (or securities convertible into shares of ~~the Corporation~~ Common Stock) at a price per share of Common Stock (or ~~any~~ having a conversion price per share of ~~its Subsidiaries by way of dividend or spin-off), on its~~ Common Stock, ~~other~~ if a security convertible into shares of Common Stock) less than ~~(A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of~~ the ~~Corporation~~30 Day Market Price on such record date, ~~determined in accordance with generally accepted accounting principles, during~~ the ~~period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions~~ maximum number of shares of Common Stock ~~which are referred~~ issuable upon exercise of such rights, options or warrants (or conversion of such convertible securities) shall be deemed to ~~in clause (i)~~ have been issued and outstanding as of ~~this paragraph G, then,~~ such record date and ~~in each such case,~~ the ~~conversion ratio~~ Conversion Ratio shall be adjusted pursuant to paragraph 8(g)(ii) hereof, as though such maximum number of shares of Common Stock had been so ~~that~~ issued for an aggregate consideration payable by the ~~holder~~ holders of ~~each share~~ such rights, options, warrants or convertible securities prior to their receipt of ~~Series B Preferred Stock~~ such shares of Common Stock. In case any portion of such consideration shall be ~~entitled~~ in a form other than cash, the fair market value of such noncash consideration shall be determined as set forth in paragraph 8(g)(ii) hereof. Such adjustment shall be made successively whenever such record date is fixed. In the event that after fixing a record date such rights, options or warrants are not so issued, the Conversion Ratio shall be readjusted to ~~receive~~the Conversion Ratio that would then be in effect if such record date had not been fixed. In the event that such rights, ~~upon~~ options or warrants expire in whole or in part unexercised or in the ~~conversion thereof,~~ event of a change in the number of shares of Common Stock ~~determined by multiplying~~ to which the holders of such rights, options or warrants are entitled (~~1) the applicable conversion ratio on the day immediately prior~~ other than pursuant to ~~the record date fixed for the determination of stockholders entitled~~ adjustment provisions therein comparable to ~~receive such dividend or distribution by (2) a fraction~~those contained in this paragraph 8(g)), the ~~numerator~~ Conversion Ratio shall again be adjusted as follows: (A) in the event that all of ~~which~~ such rights, options or warrants expire unexercised, the Conversion Ratio shall be the Conversion Ratio that would then ~~Current Market Price per share~~ be in effect if such record date had not been fixed; (B) in the event that less than all of such rights, options or warrants expire unexercised, the Conversion Ratio shall be adjusted pursuant to paragraph 8(g)(ii) to reflect the maximum number of shares of Common Stock ~~for the period~~ issuable upon exercise of ~~20 Trading Days preceding~~ such ~~record date~~rights, ~~and the denominator of which shall be such Current Market Price per share~~ options or warrants that remain outstanding (without taking into effect shares of Common Stock ~~for the period~~ issuable upon exercise of ~~20 Trading Days preceding such record date~~rights, ~~less the Fair Market Value~~ options or warrants that have lapsed or expired); and (~~as defined in Article IX~~C) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed change in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock ~~at any time outstanding~~ to which the holders of such rights, options or warrants are entitled, the Conversion Ratio shall ~~not include any~~ be adjusted to reflect the Conversion Ratio which would then be in effect if such holder had initially been entitled to such changed number of shares of Common Stock. Notwithstanding anything herein to the contrary, no further adjustment to the Conversion Ratio shall be made upon the issuance or sale of Common Stock ~~then owned~~ upon the exercise of any rights, options or ~~held by~~ warrants to subscribe for or purchase Common Stock, if any adjustment in the Conversion Ratio was made or required to be made upon the record date for the ~~account~~ issuance or sale of such rights, options or warrants under this clause 8(g)(iii). (iv) In case the ~~Corporation.~~Corporation shall fix a record date for the making of a distribution to holders

Appears in 2 contracts

Sources: Stock Purchase Agreement (Signature Eyewear Inc), Stock Purchase Agreement (Signature Eyewear Inc)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ (i) A holder of Series B D Preferred Stock shall be ~~convertible at~~ permitted to convert, or upon the ~~direction of, and by notice to~~ written request of the Corporation ~~from~~shall convert, ~~the holders of a majority of the outstanding~~ shares of Series B D Preferred ~~Stock, at any time, at the office of the Corporation or any transfer agent for such Series,~~ Stock into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject~~ (~~x) to adjustment from time to time as~~ a “Voluntary Conversion”); provided ~~below (as so adjusted~~that upon such conversion the holder, ~~the "conversion ratio") and (y) (prior to the consummation~~ together with all Affiliates of the ~~Recapitalization) to limitations~~ holder, will not own or control in the aggregate more than 9.99% of the Common Stock (or of any class of Voting Securities issued by the Corporation), excluding for the purpose of this calculation any reduction in ownership resulting from transfers by such holder and its Affiliates of Voting Securities of the ~~available number~~ Corporation (which, for the avoidance of ~~shares of Common Stock which may be reserved for issuance upon~~ doubt, does not include Series D Preferred Stock). In any such conversion, ~~provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares~~ each share of Series B D Preferred Stock ~~shall be on a pro rata basis amongst all holders~~ will convert into one share of ~~Series B Preferred~~ Common Stock. ~~After consummation of~~ To effect the ~~Recapitalization~~Voluntary Conversion, the ~~number "1,000" in this paragraph~~ holder shall ~~be "1", subject to adjustment as provided in paragraph VIII.G. B. If~~ surrender (the ~~holders~~ date of ~~a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above~~such surrender, the ~~Corporation shall notify all other record holders of Series B Preferred Stock (a "~~“Voluntary Conversion ~~Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender~~ Date”) the certificate or certificates ~~therefor~~ evidencing such shares of Series D Preferred Stock, duly endorsed, at the registered office of the ~~Corporation or of any transfer agent for such Series~~Corporation, and provide written instructions to the Corporation as to the number of whole shares for which such conversion shall ~~state therein~~ be effected, together with any appropriate documentation that may be reasonably required by the ~~name or names in which~~ Corporation. Upon the ~~certificate or certificates for shares~~ surrender of ~~Common Stock are to be issued. The~~ such certificate(s), the Corporation ~~shall, as soon as practicable thereafter,~~ will issue and deliver ~~at such office~~ to such ~~holder, or to the nominee or nominees of such holder,~~ holder a certificate or certificates for the number of shares of Common Stock into which the Series D Preferred Stock has been converted and, in the event that such conversion is with respect to ~~which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to~~ some, but not all, of the ~~close of business on the date of such Conversion Notice and the person or persons entitled to receive the~~ holder’s shares of ~~Common Stock issuable upon such conversion shall be treated for all purposes as~~ Series D Preferred Stock, a certificate or certificate(s) representing the ~~recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion~~ number of shares of Series B D Preferred Stock ~~shall be made without charge for any issue, stamp or other similar tax in respect of such issuance~~that were not converted to Common Stock. ~~C. No fractional shares shall be issued upon conversion~~ (ii) On the date (the “Mandatory Conversion Date”) a holder of Series D Preferred Stock transfers any shares of Series B D Preferred Stock to a non-Affiliate of the holder in a Permissible Transfer, each such transferred share of Series D Preferred Stock will automatically convert, immediately following such transfer and without any further action on the part of any holder, into one share of Common Stock (a “Mandatory Conversion”). (iii) As promptly as practicable following any Mandatory Conversion, the holder of the converted shares shall provide the Corporation a written notice of such conversion (a “Notice of Conversion”). In addition to any information required by applicable law or regulation, the Notice of Conversion shall state (x) the number of shares of Common Stock to be issued ~~shall~~ in respect of such conversion, (y) the name in which shares of Common Stock to be ~~rounded down to the nearest whole share~~issued upon such conversion should be registered, and (z) the ~~holder~~ manner in which certificates of Series B D Preferred Stock ~~shall~~ held. by such holder are to be ~~paid in cash~~ surrendered for ~~any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders~~ issuance of ~~its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional~~ certificates representing shares of ~~stock of any class or any other right, or there shall be any capital reorganization or reclassification~~ Common Stock. No later than three (3) business days following delivery of the ~~Common Stock~~ Notice of ~~the Corporation or consolidation or merger~~ Conversion, with respect to any shares of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B D Preferred Stock ~~at the addresses of each~~ as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which ~~paragraph H applies the Corporation~~ a Mandatory Conversion shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalizationhave occurred, the Corporation shall ~~at all times reserve~~ issue and ~~keep available out of its authorized but unissued~~ deliver certificates representing shares of Common ~~Stock~~Stock to the holder thereof or such holder’s designee upon presentation and surrender of the certificate evidencing such Series D Preferred Stock to the Corporation and, ~~solely for~~ if required, furnishing appropriate endorsements and transfer documents and the ~~purpose~~ payment of ~~effecting~~ all transfer and similar taxes, and, in the event that such conversion is with respect to some, but not all, of the shares of Series B D Preferred ~~Stock, such number of its shares of Common~~ Stock ~~as shall from time to time be sufficient to effect~~ represented by the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stockcertificate surrendered, the Corporation ~~will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as~~ shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, issue and deliver a certificate or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (icertificate(s) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive representing the number of shares ~~of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares~~ · of Series B D Preferred Stock ~~been surrendered~~ that were not converted to Common Stock. (iv) Shares of Series D Preferred Stock converted in accordance with this Section 5 will resume the status of authorized and unissued preferred stock, undesignated as to series and available for ~~conversion immediately prior~~ future issuance. (v) Prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the ~~record date for the determination~~ Voluntary Conversion Date or Mandatory Conversion Date with respect to any share of ~~holders of~~ Series D Preferred Stock, shares of Common Stock ~~entitled to receive such dividend or distribution~~issuable upon conversion thereof, or other securities issuable upon conversion of such shares of Series D Preferred Stock, shall not be deemed outstanding for any purpose, and the holder thereof shall have no rights with respect to the Common Stock (yincluding voting rights) ~~in the case~~ by virtue of ~~any~~ holding such ~~subdivision, reclassification or combination, at the close~~ share of ~~business on the day upon which such corporate action becomes effective~~Series D Preferred Stock. (iivi) ~~In the case the Corporation shall, after the Issue Date, issue~~ All shares of Common Stock ~~at a price per share, or securities convertible into or exchangeable for shares~~ delivered upon conversion of ~~Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than~~ the ~~Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of~~ Series B D Preferred Stock shall be ~~entitled to receive~~duly authorized, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock validly issued, ~~or into which the Convertible Securities may convert~~fully paid and non-assessable, free and ~~the denominator~~ clear of ~~which shall be the sum of (x) the number of shares of Common Stock outstanding on such date~~ all liens, claims, security interests, charges and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionother encumbrances. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Securities Purchase Agreement (Origin Bancorp, Inc.), Securities Purchase Agreement (Origin Bancorp, Inc.)

Conversion. ~~The holders~~ (a) At the option and election of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each~~ holder thereof, each share of Series ~~B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B~~ A Preferred Stock, including all unpaid dividends accumulated thereon to the Conversion Date (as defined below), whether or not such dividends have been declared, may be converted in the manner provided herein at any ~~time, at the office of the Corporation or any transfer agent for such Series,~~ time into ~~one thousand (1,000)~~ fully paid and nonassessable shares of Common ~~Stock~~ Stock. As of the Conversion Date with respect to a share of Series A Preferred Stock, subject to subsections (~~x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio"~~d) and (ye) ~~(prior to the consummation~~ of ~~the Recapitalization) to limitations resulting from the available~~ this Section A, such share shall be converted into that number of shares of Common Stock ~~which~~ equal to the quotient of (i) the sum of (A) the Stated Value plus (B) all unpaid dividends accumulated on such share of Series A Preferred Stock to the Conversion Date whether or not such dividends have been declared, divided by (ii) the Conversion Price in effect on the Conversion Date. (b) Conversion of shares of the Series A Preferred Stock may be ~~reserved for issuance~~ effected by any holder thereof upon ~~such conversion, provided ,that any conversion pursuant~~ the surrender to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the principal office of the Corporation or at the office of any ~~transfer~~ agent or agents of the Corporation, as may be designated by the Board of Directors of the Corporation and identified to the holders in writing upon such designation, of the certificate for such ~~Series,~~ shares of Series A Preferred Stock to be converted accompanied by a written notice stating that such holder elects to convert all or a specified whole number of shares represented by such certificate in accordance with the provisions of this Section A and ~~shall state therein~~ specifying the name or names in which such holder wishes the certificate or certificates for shares of Common Stock ~~are~~ to be issued. ~~The Corporation shall, as soon as practicable thereafter, issue and deliver at~~ In case such ~~office to such holder,~~ notice shall specify a name or ~~to the nominee or nominees~~ names other than that of such holder, ~~a certificate~~ such notice shall be accompanied by payment of all transfer taxes payable upon the issuance of shares of Common Stock in such name or names. Other than such taxes, the Corporation will pay any and all issue and other taxes (other than taxes based on income) that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of Series A Preferred Stock pursuant hereto. As promptly as practical, and in any event within three Business Days after the Conversion Date, the Corporation shall deliver or cause to be delivered as directed by the holder of shares of Series A Preferred Stock being converted (i) certificates ~~for~~ representing the number of validly issued, fully paid and nonassessable full shares of Common Stock to which such holder shall be entitled ~~as aforesaid~~to, (ii) any cash that is required to be paid pursuant to subsections (d) and (e) of this Section A, (iii) certificates representing any shares of Series B Preferred Stock that are required to be delivered pursuant to subsection (e) of this Section A, and (iv) if less than the full number of shares of Series A Preferred Stock evidenced by the surrendered certificate or certificates is being converted, a new certificate or certificates, of like tenor, for the number of shares of Series A Preferred Stock evidenced by such surrendered certificate or certificates less the number of shares of Series A Preferred Stock being converted. Such conversion shall be deemed to have ~~been made immediately prior to~~ occurred at the close of business on the date (the "Conversion Date") of the giving of such ~~Conversion Notice~~ notice by the holder of the Series A Preferred Stock to be converted and of such surrender of the certificate or certificates representing the shares of Series A Preferred Stock to be converted so that as of such time the rights of the holder thereof as to the shares being converted shall cease except for the right to receive shares of Common Stock, shares of Series B Preferred Stock and/or cash in accordance herewith, and the person ~~or persons~~ entitled to receive the shares of Common Stock ~~issuable upon~~ and/or shares of Series B Preferred Stock issued as a result of such conversion shall be treated for all purposes as having become the ~~recordholder or holders~~ holder of such shares of Common Stock ~~as of such date. The issuance of certificates or shares of Common Stock upon conversion of~~ and/or shares of Series B Preferred Stock at such time. (c) In the event that the Series A Preferred Stock is to be redeemed pursuant to Article V hereof, from and after the Redemption Date, the right of a holder to convert shares of Series A Preferred Stock pursuant to this Section A shall cease and terminate, except if the Corporation shall default in payment of the Redemption Price on the Redemption Date in which case all such rights shall continue unless and until such shares are redeemed and such price is paid in full in accordance with the terms hereof. Notwithstanding anything in the foregoing to the contrary, if the Conversion Date shall occur with respect to any shares of Series A Preferred Stock on or prior to any Redemption Date, such shares of Series A Preferred Stock shall be ~~made without charge for any issue, stamp or other similar tax~~ converted by the Corporation into Common Stock in ~~respect of such issuance.~~the manner provided in this Section A. ~~C. No fractional shares shall be issued upon~~ (d) In connection with the conversion of any shares of Series B A Preferred Stock, no fractions of shares of Common Stock shall be issued, but in lieu thereof the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Closing Price per share of Common Stock on the Conversion Date (or on the Trading Day immediately preceding the Conversion Date, if the Conversion Date is not a Trading Day). If more than one share of Series A Preferred Stock ~~and~~ shall be surrendered for conversion by the same holder on the same Conversion Date, the number of full shares of Common Stock issuable on conversion thereof shall be computed on the basis of the total number of shares of Series A Preferred Stock so surrendered. (e) Notwithstanding anything in the foregoing to the contrary, in the event that a Conversion Date with respect to a share of Series A Preferred Stock occurs prior to the date on which the Shareholder Approval is obtained, as of such Conversion Date, subject to subsection (d) of this Section A, such share shall be converted into that number of shares of Common Stock ~~to be issued shall be rounded down~~ equal to the ~~nearest whole share~~quotient of (i) the Stated Amount thereof, divided by (ii) the Conversion Price in effect on the Conversion Date, and upon delivery of such shares in accordance with the terms hereof, the Corporation shall pay in cash all accrued and unpaid dividends on such share as directed by the holder thereof; provided, however, that if, as of such Conversion Date, the Corporation is prohibited by the terms of the Credit Agreement (as in effect on the date of the Investment Agreement or any Credit Agreement containing restrictions regarding such payments that are no more restrictive that those in effect on the date of the Investment Agreement) or the Indenture (as in effect on the date of the Investment Agreement or any Indenture containing restrictions regarding such payments that are no more restrictive that those in effect on the date of the Investment Agreement) from paying such accrued and unpaid dividends in cash as required pursuant to this sentence, in satisfaction of such accrued and unpaid dividends and in lieu of such cash payment, the Corporation may deliver shares of Series B Preferred Stock ~~shall be paid in cash for any fractional share. D. In case at any time or from time~~ having an aggregate stated value equal to ~~time~~ the aggregate amount of such accrued and unpaid dividends. Until the Shareholder Approval is obtained, the Corporation shall not (A) utilize amounts available under Section 6.06(a)(ii) of the Credit Agreement (or any comparable provision of the Credit Agreement) for any purpose except to pay ~~any dividend~~ dividends in respect of the Series A Preferred Stock in cash as required pursuant to this subsection (e) or to make ~~any other distribution~~ payments with respect to the ~~holders~~ Series B Preferred Stock, or (B) amend the Credit Agreement in any manner so as to reduce the amounts available to pay dividends in respect of ~~its Common~~ the Series A Preferred Stock in cash under Section 6.06(a)(ii) of the Credit Agreement (or any comparable provision of the Credit Agreement). Notwithstanding the foregoing, this paragraph shall not prohibit (i) the acquisition, repurchase, exchange, conversion, redemption or other retirement for value of shares of Series A Preferred Stock or ~~other class~~ any Parity Dividend Security by the Corporation in accordance with the terms of such securities, ~~or shall offer for subscription pro rata to the holders~~ (ii) purchases of ~~its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock~~ Equity Securities of the Corporation or ~~consolidation or merger~~ any of its Subsidiaries from executives and other management-level employees of the Corporation or any of its Subsidiaries in connection with ~~or into another corporation~~customary employment and severance arrangements, or ~~any sale~~ (iii) the acquisition, repurchase, exchange, conversion, redemption or ~~conveyance to another corporation of the property of~~ other retirement for value by the Corporation ~~as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up~~ of ~~the Corporation, then, in~~ any ~~one or more of said cases~~ Junior Dividend Securities by the Corporation ~~shall give~~ in accordance with obligations in existence at ~~least 20 days' prior written notice (~~the time of ~~mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders~~ original issuance of the Series B A Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so takenStock. ~~E. From and after the Recapitalization, the~~ (f) The Corporation shall at all times reserve and keep available ~~out~~ for issuance upon the conversion of the Series A Preferred Stock in accordance with the terms hereof, such number of its authorized but unissued shares of Common ~~Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common~~ Stock as ~~shall~~ will from time to time be sufficient to ~~effect~~ permit the conversion of all outstanding shares of Series B A Preferred Stock, and ~~if at any time the number of authorized but unissued shares of Common Stock~~ shall ~~not be sufficient to effect the conversion of~~ take all ~~then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate~~ action ~~as may, in the opinion of its counsel, be necessary~~ required to increase ~~its~~ the authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock ~~or other securities~~ if necessary to permit the conversion of ~~the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such~~ all outstanding shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B A Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Investment Agreement (TPG Advisors Ii Inc), Investment Agreement (TPG Advisors Ii Inc)

Conversion. ~~The holders~~ At any time prior to the Maturity Date, Holder shall have the right to convert all or any portion of up to twenty percent (20%) of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ original outstanding principal balance of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, this Note into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock (the “Conversion Shares”) at a conversion price per share (the “Conversion Price”) equal to $0.50 (subject ~~(x)~~ to adjustment ~~from time to time~~ as provided ~~below (as so adjusted~~in Section 4). Notwithstanding the foregoing, the "number of Conversion Shares issuable upon exercise of this Note, when combined with the aggregate number of Conversion Shares previously issued upon conversion ~~ratio") and (y) (prior to the consummation~~ of the ~~Recapitalization) to limitations resulting from~~ Notes and the ~~available~~ aggregate number of shares of Common Stock ~~which may be reserved for issuance~~ previously issued upon ~~such conversion, provided ,that any conversion pursuant to this paragraph A of less than all~~ exercise of the ~~outstanding shares~~ Warrants (“Warrant Shares”), may not, in the absence of ~~Series B Preferred Stock shall be on a pro rata basis amongst all holders~~ approval by the Company’s shareholders, exceed 19.9% of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock ~~to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made~~ issued and outstanding immediately prior to the ~~close of business on the~~ effective date of ~~such Conversion Notice and~~ the ~~person or persons entitled~~ Loan Agreement. If any conversion of this Note pursuant to ~~receive~~ this Section 3(a) would otherwise result in the ~~shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The~~ issuance of ~~certificates or shares~~ Conversion Shares in excess of ~~Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue~~the limitation set forth in the immediately preceding sentence (the “Excess Conversion”), ~~stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock~~ the Company will use its reasonable best efforts to prepare and file requisite proxy materials with the ~~number of shares of Common Stock to be issued shall be rounded down to the nearest whole share,~~ Securities and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders Exchange Commission and hold a meeting of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely shareholders for the purpose of ~~effecting~~ seeking approval for the ~~conversion of~~ Excess Conversion (the ~~shares of Series B Preferred Stock, such number~~ “Proposal”). In furtherance of its ~~shares~~ obligations under this Section 3(a), the Company’s Board of ~~Common Stock as~~ Directors shall ~~from time~~ recommend to ~~time be sufficient to effect~~ the ~~conversion of all outstanding shares of Series B Preferred Stock~~Company’s shareholders, ~~and if at any time the number of authorized but unissued shares of Common Stock~~ which recommendation shall not be ~~sufficient~~ revoked or amended, that the shareholders vote in favor of and approve the Proposal and shall cause the Company to use its best efforts to solicit approval of the shareholders for the Proposal. If the Company’s shareholders approve the Proposal, the Company will promptly effect the ~~conversion~~ Excess Conversion. If the Company’s shareholders do not approve the Proposal, the Holder acknowledges that the Company will not make the Excess Conversion and that the Company may not otherwise compensate the Holder for the failure to make the Excess Conversion. In the event there shall be an Excess Conversion, the Company shall have the right to deposit the principal balance of the Note represented by the Excess Conversion and defease the Note (or portion thereof) following performance of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books obligations of the ~~Corporation~~Company under the Loan Agreement. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Bridge Loan Agreement (Granite City Food & Brewery LTD), Bridge Loan Agreement (Granite City Food & Brewery LTD)

Conversion. ~~The holders~~ (a) At the Payee’s option, at any time prior to payment in full of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ principal balance of ~~Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from~~this Note, the ~~holders of a majority~~ Payee may elect to convert all or any portion of the outstanding ~~shares~~ principal amount of ~~Series B Preferred Stock, at any time, at~~ this Note into that number of warrants (the ~~office~~ “Conversion Warrants”) equal to: (i) the portion of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation principal amount of the ~~Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion~~ Note being converted pursuant to this ~~paragraph A~~ Section 15, divided by (ii) $1.50, rounded up to the nearest whole number; provided, however, that the principal amount of ~~less than all~~ any Working Capital Promissory Notes converted shall not exceed in the aggregate $1,500,000 and that amounts of ~~the outstanding shares of Series B Preferred Stock~~ principal converted under this Note shall be on a pro rata basis ~~amongst all holders of Series B Preferred Stock. After consummation~~ (based on the allocation set forth on Schedule I of the ~~Recapitalization~~Agreement) with amounts converted under the other Working Capital Promissory Note. Each Conversion Warrant shall have the same terms and conditions as the warrants issued by the Maker to the Payee pursuant to a private placement, as described in Maker’s Registration Statement on Form S-1 (333-251756). The Conversion Warrants, the ~~number "1,000"~~ Class A Shares underlying the Conversion Warrants and any other equity security of Maker issued or issuable with respect to the foregoing by way of a share dividend or share split or in ~~this paragraph~~ connection with a combination of shares, recapitalization, amalgamation, consolidation or reorganization, shall be ~~"1"~~entitled to the registration rights set forth in that certain Registration and Shareholder Rights Agreement, ~~subject to adjustment~~ dated as ~~provided in paragraph VIII.G.~~of January 12, 2021, among the Company, the Payees and the other parties thereto. ~~B. If the holders of a majority~~ (b) Upon any complete or partial conversion of the ~~outstanding shares~~ principal amount of ~~Series B Preferred Stock give notice~~ this Note, (i) such principal amount shall be so converted and such converted portion of ~~conversion under paragraph A above~~this Note shall become fully paid and satisfied, (ii) the ~~Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock~~ Payee shall surrender ~~the certificate or certificates therefor~~ and deliver this Note, duly endorsed, ~~at the office~~ to Maker or such other address which Maker shall designate against delivery of the ~~Corporation~~ Conversion Warrants, (iii) Maker shall promptly deliver a new duly executed Note to the Payee in the principal amount that remains outstanding, if any, after any such conversion and (iv) in exchange for all or any portion of the surrendered Note, Maker shall deliver to Payee the Conversion Warrants, which shall bear such legends as are required, in the opinion of counsel to Maker or by any ~~transfer agent for such Series,~~ other agreement between Maker and the Payee and applicable state and federal securities laws. (c) The Payee shall ~~state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter,~~ pay any and all issue and ~~deliver at such office~~ other taxes that may be payable with respect to ~~such holder,~~ any issue or to delivery of the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock Warrants upon conversion of ~~shares of Series B Preferred Stock~~ this Note pursuant hereto; provided, however, that the Payee shall not be ~~made without charge for~~ obligated to pay any ~~issue, stamp or other similar tax~~ transfer taxes resulting from any transfer requested by the Payee in ~~respect of~~ connection with any such ~~issuance~~conversion. ~~C. No fractional shares~~ (d) The Conversion Warrants shall not be issued upon conversion of ~~any shares of Series B Preferred Stock~~ this Note unless such issuance and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation such conversion comply with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the applicable provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporationlaw. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Working Capital Loan Agreement (Pontem Corp), Working Capital Loan Agreement (Pontem Corp)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each whole share of Series B C Junior Convertible Preferred Stock ~~shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~is convertible, at any time from and after the thirtieth day following the conclusion of the next annual meeting of stockholders of the Corporation (provided, however, such date shall be extended to the first anniversary of such thirtieth day if prior thereto any person has become an "Acquiring Person" (as defined in the Rights Agreement, dated as of March 8, 2000, between the Corporation and American Stock Transfer & Trust Company, as rights agent, as such may be amended from time to time)), at the ~~office~~ option of the ~~Corporation or any transfer agent for such Series~~holder thereof, into one thousand (~~1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment~~ as such may be adjusted from time to time ~~as provided below (as so adjusted~~pursuant to Section 7(b) hereof, the "~~conversion ratio~~Conversion Ratio") shares of Common Stock, par value $0.00001 per share, of the Corporation (the "Common Stock"). (b) If the Corporation shall at any time or from time to time (i) declare and pay any dividend on Common Stock payable in shares of Common Stock, (yii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Conversion Ratio in effect immediately prior to such event shall be adjusted by multiplying such Conversion Ratio by a fraction the ~~consummation~~ numerator of which is the ~~Recapitalization) to limitations resulting from the available~~ number of shares of Common Stock outstanding immediately after such event and the denominator of which ~~may be reserved for issuance upon~~ is the number of shares of Common Stock that were outstanding immediately prior to such ~~conversion, provided ,that any conversion~~ event. Any adjustments made pursuant to this ~~paragraph A of less than all~~ Section 7(b) shall become effective on the date of the ~~outstanding shares~~ respective dividend, subdivision or combination. Such adjustments shall be made successively. (c) Before any holder of Series B C Junior Convertible Preferred Stock shall be ~~on a pro rata basis amongst all holders of Series B Preferred~~ entitled to convert the same into Common Stock~~. After consummation of the Recapitalization~~, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock such holder shall surrender the certificate or certificates ~~therefor duly endorsed~~for such Series C Junior Convertible Preferred Stock to the Corporation at the Corporation's principal office, or at the office of any transfer agent appointed by the Corporation, which certificate or certificates, if the Corporation shall so request, shall be duly endorsed to the Corporation or ~~of any transfer agent for such Series~~in blank, and shall give written notice to the Corporation that the holder elects to convert such shares of Series C Junior Convertible Preferred Stock into Common Stock and shall state ~~therein~~ in such notice the name or names in which he wishes the certificate or certificates for ~~shares of~~ Common Stock ~~are~~ to be issued. . (d) The Corporation ~~shall~~will, as soon as practicable ~~thereafter~~after such surrender of certificates for Series C Junior Convertible Preferred Stock accompanied by the written notice above prescribed, issue and deliver ~~at such office~~ or cause to ~~such holder~~be issued and delivered, to the holder or to ~~the~~ his nominee or ~~nominees of such holder~~nominees, ~~a certificate or~~ certificates for the number of shares of Common Stock to which ~~such~~ the holder shall be ~~entitled as aforesaid~~entitled. ~~Such~~ Subject to the following provisions of this Section, such conversion shall be deemed to have been made ~~immediately prior to the close~~ as of ~~business on~~ the date of such ~~Conversion Notice~~ surrender of the Series C Junior Convertible Preferred Stock to be converted, and the person or persons entitled to receive the ~~shares of~~ Common Stock issuable upon conversion of such ~~conversion~~ Series C Junior Convertible Preferred Stock shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such ~~shares of~~ Common Stock ~~as of~~ on such date~~. The issuance~~ . (e) As soon as practicable after the surrender of ~~certificates or shares of Common Stock upon conversion of~~ a certificate representing shares of Series B C Junior Convertible Preferred Stock ~~shall be made without charge for any issue, stamp or other similar tax~~ that is converted in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalizationpart, the Corporation shall ~~at all times~~ issue or cause to be issued for the holder a new certificate representing shares of Series C Junior Convertible Preferred Stock equal in number to the unconverted portion of the shares of Series C Junior Convertible Preferred Stock represented by the certificate so surrendered. (f) The Corporation shall reserve and keep ~~available~~ available, out of its authorized ~~but~~ and unissued ~~shares of~~ Common Stock, solely for the purpose of effecting the conversion of the ~~shares of~~ Series B C Junior Convertible Preferred Stock, such number of ~~its~~ shares of Common Stock as shall from time to time be sufficient to effect the conversion of all ~~outstanding~~ shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B C Junior Convertible Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time ~~as follows:~~outstanding. (ig) ~~In case the~~ The Corporation ~~shall at~~ will pay any ~~time or from time to time after the Issue Date~~ and all issue and other taxes (Aother than taxes based on income) ~~pay a dividend or make a distribution, on the outstanding shares of Common Stock~~ that may be payable in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder respect of any ~~shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number~~ issuance or delivery of shares of Common Stock ~~or other securities~~ on conversion of the Series C Junior Convertible Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax which ~~such holder would have owned or have been entitled to receive after the happening~~ may be payable in respect of any transfer involving the issuance and delivery of Common Stock in a name other than that in which the ~~events described above, had such shares of~~ Series B C Junior Convertible Preferred Stock ~~been surrendered for conversion immediately prior~~ so converted was registered, and no such issuance or delivery shall be made unless and until the person requesting such issuance has paid to the ~~happening of such event or~~ Corporation the ~~record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case~~ amount of any such ~~dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution~~tax, or ~~(y) in the case of any such subdivision~~has established, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items satisfaction of the Corporation, ~~determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date~~ that such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offtax has been paid. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Rights Agreement (Quanta Services Inc), Rights Agreement (Quanta Services Inc)

Conversion. ~~The holders~~ (a) Holders of Series D Convertible Preferred Shares shall have the right, exercisable at any time and from time to time, except in the case of the Series B D Convertible Preferred ~~Stock shall have~~ Shares called for redemption as set forth below, to convert all or any such Series D Convertible Preferred Shares into Common Shares at [the conversion ~~rights as follows: A. Each share of Series B Preferred Stock shall be convertible at~~ price and ratio determined by the ~~direction of, and by notice to the Corporation from, the holders of a majority~~ provisions of the ~~outstanding shares of~~ ▇▇▇▇▇ Articles Supplementary designating the ▇▇▇▇▇ Series B A Convertible Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1"Shares], subject to adjustment as described below. In the case of Series D Convertible Preferred Shares called for redemption, conversion rights will expire at the close of business on the last business day preceding the Redemption Date. Notice of redemption at the option of the Trust must be mailed not less than 30 days and not more than 60 days prior to the Redemption Date as provided in ~~paragraph VIII.G. B. If~~ Section 13.4(4)(c) hereof. Upon conversion, no adjustment or payment will be made for distributions, but if any holder surrenders Series D Convertible Preferred Shares for conversion after the ~~holders~~ close of business on the record date for the payment of a ~~majority~~ distribution and prior to the opening of business on the ~~outstanding~~ related distribution payment date, then, notwithstanding such conversion, the distribution payable on such distribution payment date will be paid to the registered holder of such shares on such distribution record date. In such event, such shares, when surrendered for conversion during the period between the close of ~~Series B Preferred Stock give~~ business on any distribution record date and the opening of business on the corresponding distribution payment date, must be accompanied by payment of an amount equal to the distribution payable on such distribution payment date on the shares so converted (unless such shares were converted after the issuance of a notice of ~~conversion under paragraph A above~~redemption with respect to such shares, in which event such shares shall be entitled to the ~~Corporation~~ distribution payable thereon on such distribution payment date without making such payment). (b) Any holder of one or more Series D Convertible Preferred Shares electing to convert such share or shares shall ~~notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender~~ deliver the certificate or certificates therefor ~~duly endorsed, at~~ to the principal office ~~of the Corporation or~~ of any transfer agent for ~~such Series~~the Common Shares, with the form of notice of election to convert as the Trust shall prescribe fully completed and duly executed and (if so required by the Trust or any conversion agent) accompanied by instruments of transfer in form satisfactory to the Trust and to any conversion agent, duly executed by the registered holder or his duly authorized attorney, and ~~shall state therein the name~~ transfer taxes, stamps or ~~names in which the certificate~~ funds therefor or ~~certificates for shares~~ evidence of ~~Common Stock are~~ payment thereof if required pursuant to ~~be issued~~Section 13.4(7)(a) or 13.4(7)(d) hereof. The ~~Corporation shall, as soon as practicable thereafter, issue and deliver at~~ conversion right with respect to any such ~~office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of~~ shares ~~of Common Stock to which such holder shall be entitled as aforesaid. Such conversion~~ shall be deemed to have been ~~made immediately prior to the close of business on~~ exercised at the date upon which the certificates therefor accompanied by such duly executed notice of election and instruments of transfer and such ~~Conversion Notice~~ taxes, stamps, funds or evidence of payment shall have been so delivered, and the person or persons entitled to receive the shares of the Common ~~Stock~~ Shares issuable upon such conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such shares of the Common ~~Stock as of such~~ Shares upon said date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. (c) No fractional ~~shares~~ Common Share or scrip representing a fractional share shall be issued upon conversion of ~~any shares of~~ Series B D Convertible Preferred ~~Stock and~~ Shares. If more than one Series D Convertible Preferred Share shall be surrendered for conversion at one time by the same holder, the number of ~~shares~~ full Common Shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate number of Series D Convertible Preferred Shares so surrendered. Instead of any fractional Common Share which would otherwise be issuable upon conversion of any Series D Convertible Preferred Shares, the Trust shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the closing price for the Common Shares on the last trading day preceding the date of conversion. The closing price for such day shall be the last reported sales price regular way or, in case no such reported sale takes place on such date, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange, or if the Common Shares are not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Shares are listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, the closing sale price of the Common Shares or in case no reported sale takes place, the average of the closing bid and asked prices, on NASDAQ or any comparable system. If the Common Shares are not quoted on NASDAQ or any comparable system, the Board of Trustees shall in good faith determine the current market price on the basis of such quotation as it considers appropriate. (d) If a holder converts Series D Convertible Preferred Shares, the Trust shall pay any documentary, stamp or similar issue or transfer tax due on the issuance of Common ~~Stock~~ Shares upon the conversion. The holder, however, shall pay to the Trust the amount of any tax which is due (or shall establish to the satisfaction of the Trust payment thereof) if the shares are to be issued in a name other than the name of such holder and shall ~~be rounded down~~ pay to the ~~nearest whole share, and~~ Trust any amount required by the ~~holder~~ last sentence of ~~Series B Preferred Stock shall be paid in cash for any fractional share~~Section 13.4(7)(a) hereof. ~~D. In case at any time or from time to time the Corporation~~ (e) The Trust shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From reserve and ~~after the Recapitalization, the Corporation~~ shall at all times ~~reserve and keep available~~ have reserved out of its authorized but unissued ~~shares~~ Common Shares a sufficient number of Common ~~Stock, solely for the purpose of effecting~~ Shares to permit the conversion of the ~~shares~~ then outstanding Series D Convertible Preferred Shares. All Common Shares which may be issued upon conversion of Series B D Convertible Preferred ~~Stock~~Shares shall be validly issued, ~~such number of its shares of~~ fully paid and nonassessable, and not subject to preemptive or other similar rights. In order that the Trust may issue Common ~~Stock as shall from time to time be sufficient to effect the~~ Shares upon conversion of Series D Convertible Preferred Shares, the Trust will endeavor to comply with all ~~outstanding shares of Series B Preferred Stock,~~ applicable Federal and if State securities laws and will endeavor to list such Common Shares to be issued upon conversion on each securities exchange on which the Common Shares are listed. (f) The conversion rate in effect at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the ~~Corporation~~ Trust shall ~~at any time or from time to time after the Issue Date~~ (A1) pay ~~a dividend~~ or make a ~~distribution~~distribution in Common Shares to holders of the Common Shares, on (2) reclassify the outstanding Common Shares into shares of ~~Common Stock in shares~~ some other class or series of ~~Common Stock~~shares, (B3) subdivide the outstanding ~~shares~~ Common Shares into a greater number of Common ~~Stock into a larger number of shares of Common Stock,~~ Shares or (C4) combine the outstanding ~~shares of~~ Common ~~Stock~~ Shares into a smaller number of ~~shares or (D) issue by reclassification of the shares of~~ Common ~~Stock any shares of capital stock of the Corporation, then, and in each such case~~Shares, the conversion ~~ratio in effect~~ rate immediately prior to such ~~event or the record date therefor, whichever is earlier,~~ action shall be adjusted so that the holder of any ~~shares of~~ Series B D Convertible Preferred ~~Stock~~ Shares thereafter surrendered for conversion shall be entitled to receive the number of ~~shares of~~ Common ~~Stock or other securities of the Corporation~~ Shares which ~~such holder~~ he would have owned ~~or have been entitled to receive after the happening of any of the events described above,~~ immediately following such action had such ~~shares of~~ Series B D Convertible Preferred ~~Stock~~ Shares been ~~surrendered for conversion~~ converted immediately prior ~~to the happening of such event or the record date therefor, whichever is earlier~~thereto. An adjustment made pursuant to this ~~clause (i~~Section 13.4(7)(f)(i) shall become effective ~~(x)~~ immediately after the record date in the case of ~~any such dividend or distribution,~~ a distribution and shall become effective immediately after the ~~close~~ effective date in the case of ~~business~~ a subdivision, combination or reclassification. (ii) In case the Trust shall issue rights or warrants to all holders of the Common Shares entitling them to subscribe for or purchase Common Shares (or securities convertible into Common Shares) at a price per share less than the current market price (as determined pursuant to Section 13.4(7)(f)(iv)) of the Common Shares on such record date, the number of Common Shares into which each Series D Convertible Preferred Share shall be convertible shall be adjusted so that the same shall be equal to the number determined by multiplying the number of Common Shares into which such Series D Convertible Preferred Share was convertible immediately prior to such record date by a fraction of which the numerator shall be the number of Common Shares outstanding on such record date plus the number of additional Common Shares offered (or into which the convertible securities so offered are convertible), and of which the denominator shall be the number of Common Shares outstanding on such record date, plus the number of Common Shares which the aggregate offering price of the additional Common Shares offered (or into which the convertible securities so offered are convertible) would purchase at such current market price. Such adjustments shall become effective immediately after such record date for the determination of the holders of ~~shares of~~ the Common ~~Stock~~ Shares entitled to receive such ~~dividend or~~ distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this ~~clause~~ subsection (ii), the ~~aggregate consideration receivable by~~ number of Common Shares at any time outstanding shall not include Common Shares held in the ~~Corporation in connection with the issuance of any securities shall be deemed to be the sum~~ treasury of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionTrust. (iii) In case the ~~Corporation~~ Trust shall at distribute to all holders of the Common Shares any ~~time~~ class of shares of beneficial interest other than the Common Shares, evidences of indebtedness or ~~from time~~ assets of the Trust (other than cash distributions out of current or retained earnings), or shall distribute to ~~time after~~ all holders of the ~~Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or~~ Common Shares rights or warrants to subscribe for securities ~~of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock,~~ (other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are those referred to in ~~clause (i) of this paragraph G~~Section 13.4(7)(f)(ii)), ~~then, and~~ then in each such ~~case,~~ case the ~~conversion ratio~~ number of Common Shares into which each Series D Convertible Preferred Share shall be convertible shall be adjusted so that the same shall equal the number determined by multiplying the number of Common Shares into which such Series D Convertible Preferred Share was convertible immediately prior to the date of such distribution by a fraction of which the numerator shall be the current market price (determined as provided in Section 13.4(7)(f)(iv)) of the Common Shares on the record date mentioned below, and of which the denominator shall be such current market price of the Common Shares, less the then fair market value (as determined by the Board of Trustees, whose determination shall be conclusive evidence of such fair market value) of the portion of the securities or assets so distributed or of such subscription rights or warrants applicable to one Common Share. Such adjustment shall become effective immediately after the record date for the determination of the holders of the Common Shares entitled to receive such distribution. Notwithstanding the foregoing, in the event that the Trust shall distribute rights or warrants (other than those referred to in Section 13.4(7)(f)(ii)) ("Rights") pro rata to holders of the Common Shares, the Trust may, in lieu of making any adjustment pursuant to this Section 13.4(7)(f)(iii), make proper provision so that each holder of ~~each~~ a Series D Convertible Preferred Share who converts such share after the record date for such distribution and prior to the expiration or redemption of ~~Series B Preferred Stock~~ the Rights shall be entitled to ~~receive~~receive upon such conversion, in addition to the Common Shares issuable upon such conversion (the "Conversion Shares"), a number of Rights to be determined as follows: (1) if such conversion ~~thereof~~occurs on or prior to the date for the distribution to the holders of Rights of separate certificates evidencing such Rights (the "Distribution Date"), the same number of Rights to which a holder of a number of Common Shares equal to the number of ~~shares~~ Conversion Shares is entitled at the time of such conversion in accordance with the terms and provisions of and applicable to the Rights; and (2) if such conversion occurs after the Distribution Date, the same number of Rights to which a holder of the number of Common ~~Stock determined by multiplying (1) the applicable conversion ratio on the day~~ Shares into which a Series D Convertible Preferred Share so converted was convertible immediately prior to the ~~record date fixed for~~ Distribution Date would have been entitled on the ~~determination~~ Distribution Date in accordance with the terms and provisions of ~~stockholders entitled~~ and applicable to ~~receive such dividend or distribution by~~ the Rights. (2iv) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the The current market price per share of the Common Shares on any date shall be deemed to be the average of the daily closing prices for thirty consecutive trading days commencing forty-five trading days before the date in question. The closing price for each day shall be the last reported sales price regular way or, in case no such reported sale takes place on such date, the average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange, or if the Common Shares are not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Shares are listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, the closing sale price of the Common Shares or, in case no reported sale takes place, the average of the closing bid and asked prices, on NASDAQ or any comparable system, or if the Common Shares are not quoted on NASDAQ or any comparable system, the closing sale price or, in case no reported sale takes place, the average of the closing bid and asked prices, as furnished by any two members of the National Association of Securities Dealers, Inc. selected from time to time by the Trust for ~~the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to~~ that purpose. (v) In any case in which this ~~clause (iii~~Section 13.4(7) shall require that an adjustment be made immediately following a record date, the Trust may elect to defer (but only until five business days following the mailing of the notice described in Section 13.4(7)(j)) issuing to the holder of any Series D Convertible Preferred Shares converted after such record date the Common Shares and other shares of beneficial interest of the Trust issuable upon such conversion over and above the ~~opening~~ Common Shares and other shares of ~~business~~ beneficial interest of the Trust issuable upon such conversion only on the ~~next Business Day following~~ basis of the ~~date on~~ conversion rate prior to adjustment; and, in lieu of the shares the issuance of which ~~any such dividend~~ is so deferred, the Trust shall issue or ~~distribution is made and shall be effective retroactively immediately after~~ cause its transfer agents to issue appropriate evidence of the ~~close of business on the record date fixed for the determination of stockholders entitled~~ right to receive such ~~dividend~~ shares. (g) No adjustment in the conversion rate shall be required until cumulative adjustments result in a change of 1% or ~~distribution~~more of the conversion price as in effect prior to the last adjustment of the conversion rate; provided, however, ~~if the proviso~~ that any adjustment which by reason of this Section 13.4(7)(g) is not required to ~~the preceding sentence applies, then such adjustment~~ be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 13.4(7) shall be made ~~and~~ to the nearest cent ($.01) or to the nearest one-hundredth (1/100) of a share, as the case may be. No adjustment to the conversion rate shall be ~~effective as of such 35th Trading Day after the effective date of such Spin-Off~~made for cash dividends. (ivh) ~~For purposes~~ In the event that, as a result of ~~this paragraph G~~an adjustment made pursuant to Section 13.4(7)(f), the holder of any Series D Convertible Preferred Shares thereafter surrendered for conversion shall become entitled to receive any shares of beneficial interest of the Trust other than Common Shares, thereafter the number of such other shares so receivable upon conversion of any Series D Convertible Preferred Shares shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common ~~Stock at~~ Shares contained in this Section 13.4(7). (i) The Trust may make such increases in the conversion rate, in addition to those required by Sections 13.4(7)(f)(i), (ii) and (iii), as is considered to be advisable in order that any ~~time outstanding~~ event treated for Federal income tax purposes as a distribution of shares or share rights shall not ~~include any shares~~ be taxable to the recipients thereof. (j) Whenever the conversion rate is adjusted, the Trust shall promptly mail to all holders of ~~Common Stock then owned or held~~ record of Series D Convertible Preferred Shares a notice of the adjustment and shall cause to be prepared a certificate signed by or a principal financial officer of the Trust setting forth the adjusted conversion rate and a brief statement of the facts requiring such adjustment and the computation thereof; such certificate shall forthwith be filed with each transfer agent for the ~~account~~ Series D Convertible Preferred Shares. (k) In the event that: (1) the Trust takes any action which would require an adjustment in the conversion rate, (2) the Trust consolidates or merges with, or transfers all or substantially all of its assets to, another corporation and shareholders of the ~~Corporation.~~Trust must approve the transaction, or (3) there is a

Appears in 2 contracts

Sources: Merger Agreement (Equity Residential Properties Trust), Merger Agreement (Equity Residential Properties Trust)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each share of ~~Series~~ Class B ~~Preferred~~ Common Stock shall be ~~convertible~~ converted at ~~the direction of~~such time, in such manner and ~~by notice to the Corporation from,~~ upon such terms and conditions as provided herein into one fully paid and non-assessable share of Class A Common Stock. (b) Each share of Class B Common Stock shall automatically convert into a share of Class A Common Stock (x) at such time as the holders of ~~a majority~~ all Class B Common Stock cease to own in the aggregate 15% of the issued and outstanding ~~shares of Series B Preferred~~ Common Stock, or (y) at ~~any time, at the office of the Corporation or any transfer agent for~~ such ~~Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to~~ earlier time as provided ~~below (as so adjusted~~in Section 3 of this Article FOURTH, ~~the "~~Division B. Upon automatic conversion ~~ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number~~ of shares of Class B Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall ~~notify~~ reflect such conversion, and the issuance of Class A Common Stock in connection therewith on its books and records for all ~~other record holders~~ purposes even if certificates reflecting such converted shares of ~~Series~~ Class B ~~Preferred~~ Common Stock are not surrendered to the Corporation or its transfer agent. All shares of Class B Common Stock, upon conversion thereof into Class A Common Stock, shall retain their designation as Class B Common Stock and shall have the status of authorized and unissued shares of Class B Common Stock; provided that if all shares of Class B Common Stock outstanding are converted into shares of Class A Common Stock, then all authorized but unissued shares or treasury shares of Class B Common Stock shall automatically convert into authorized but unissued or treasury shares of Class A Common Stock, as the case may be, and no further shares of Class B Common Stock shall exist. Except as specifically contemplated under this Section 4, shares of Class B Common Stock may not be converted into Class A Common Stock. (c) Each share of Class A Common Stock beneficially owned (within the meaning of Section 3 of this Article FOURTH, Division B) by Chevron U.S.A. Inc., a Pennsylvania corporation ("~~Conversion Notice~~Chevron"), or its Affiliates shall simultaneous with Chevron or its Affiliate acquiring such ownership automatically be converted into one fully paid and non-assessable share of Class B Common Stock; provided, however, that for purposes of any shares of Class B Common Stock so issued, only Chevron will be deemed to be the Original Holder thereof for purposes of the provisions of Section 3 of this Article FOURTH, Division B, and provided, further, that this provision shall not apply with respect to shares of Class A Common Stock issued upon conversion of all Class B Common Stock in accordance with part (x) of the first sentence of paragraph (b) of this Section 4, or any shares of Class A Common Stock owned by Chevron or its Affiliates, after such conversion shall have occurred. ~~Following receipt~~ Upon automatic conversion of shares of Class A Common Stock, the Corporation shall reflect such conversion and the issuance of Class B Common Stock in connection therewith on its books and records for all purposes even if certificates reflecting such converted shares of Class A Common Stock are not surrendered to the Corporation for transfer. All shares of Class B Common Stock shall be subject to the restrictions and provisions contained in this Restated Certificate of Incorporation. All shares of Class A Common Stock, upon conversion thereof into Class B Common Stock, shall retain their designation as Class A Common Stock and shall have the status of authorized and unissued shares of Class A Common Stock. (d) Nothing herein shall prevent the Original Holder (or any Permitted Transferee) of the Class B Common Stock and the Corporation from executing an agreement allowing the Original Holder (or any Permitted Transferee), at its option, to convert the Class B Common Stock into Class A Common Stock, nor the conversion of any Class B Common Stock pursuant to such agreement. (e) The Corporation will, as soon as practicable after such deposit of a ~~Conversion Notice, the holders of Series B Preferred Stock shall surrender the~~ certificate or certificates ~~therefor duly endorsed~~for Common Stock to be converted in accordance with this Section 4, issue and deliver at the office of the Corporation or of ~~any~~ its transfer agent to the person for whose account such ~~Series, and shall state therein the name or names in which the certificate or certificates for shares of~~ Common Stock ~~are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder~~was so surrendered, a certificate or certificates for the number of full shares of Common Stock to into which ~~such holder shall be entitled as aforesaid~~the shares represented by the surrendered certificate are converted. ~~Such conversion shall be deemed to have been made immediately prior~~ If surrendered certificates for Common Stock are converted only in part, the Corporation will issue and deliver to the ~~close~~ holder, without charge therefor, a new certificate or certificates representing the aggregate of ~~business on~~ the ~~date~~ unconverted shares of such ~~Conversion Notice and~~ class of Common Stock. The failure of the ~~person or persons entitled~~ holder to ~~receive~~ deliver to the Corporation certificates representing shares of a class of Common Stock ~~issuable upon such~~ converted in accordance with this Section 4, shall in no way affect the automatic conversion ~~shall be treated for all purposes as the recordholder or holders~~ of such ~~shares of Common Stock as of such date.~~ shares. (f) The issuance of certificates or for shares of a class of Common Stock upon conversion of shares of ~~Series B Preferred~~ the other class of Common Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance~~. C. No fractional shares shall~~ ; provided, however, if any such certificate is to be issued ~~upon conversion~~ in a name other than that of ~~any~~ the holder of the share or shares of ~~Series B Preferred Stock and~~ the ~~number of shares~~ class of Common Stock ~~to be issued~~ converted, the person or persons requesting the issuance thereof shall ~~be rounded down~~ pay to the ~~nearest whole share, and~~ Corporation the ~~holder~~ amount of ~~Series B Preferred Stock~~ any tax which may be payable in respect of any transfer involved in such issuance or shall ~~be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution~~ establish to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock satisfaction of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of that such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so takentax has been paid. ~~E. From and after the Recapitalization, the~~ (g) The Corporation shall at all times reserve and keep ~~available out of its authorized but unissued shares of Common Stock~~available, solely for the purpose of ~~effecting the~~ issuance upon conversion of the outstanding shares of ~~Series~~ Class B ~~Preferred~~ Common Stock, such number of ~~its~~ shares of Class A Common Stock as shall be issuable upon the conversion of all such outstanding shares, provided that nothing contained herein shall be construed to preclude the Corporation from satisfying the obligations in respect of the conversion of the outstanding shares of Class B Common Stock by delivery of shares of Class A Common Stock which are held in the treasury of the Corporation. The Corporation shall take all such corporate and other actions as from time to time may be ~~sufficient~~ necessary to ~~effect the~~ insure that all shares of Class A Common Stock issuable upon conversion of ~~all outstanding~~ shares of ~~Series~~ Class B ~~Preferred Stock~~Common Stock upon issue will be duly and validly authorized and issued, fully paid and ~~if at~~ nonassessable and free of any ~~time~~ preemptive or similar rights. In order that the ~~number of authorized but unissued~~ Corporation may issue shares of Class A Common Stock ~~shall not be sufficient to effect the~~ upon conversion of ~~all then outstanding shares of Series~~ the Class B ~~Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred~~ Common Stock, the Corporation will ~~take~~ endeavor to comply with all applicable Federal and state securities laws and will endeavor to list such ~~corporate action as may~~shares to be issued upon conversion on such securities exchange on which the Class A Common Stock is then listed. (h) The Corporation shall at all times reserve and keep available, in solely for the ~~opinion~~ purpose of ~~its counsel, be necessary to increase its authorized but unissued~~ issuance upon conversion of the outstanding shares of Class A Common Stock ~~to such~~ a number of shares as of Class B Common Stock equal to 40% of the number of outstanding shares of Class A Common Stock, provided that nothing contained herein shall be ~~sufficient for such purposes. F. Any notice required~~ construed to preclude the Corporation from satisfying the obligations in respect of the conversion of the outstanding shares of Class A Common Stock by ~~the provisions of paragraph D to be given the holders~~ delivery of shares of ~~Series~~ Class B ~~Preferred~~ Common Stock ~~shall be deemed given if sent by facsimile transmission, by telex, or if deposited~~ which are held in the ~~United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books~~ treasury of the Corporation~~. G.~~ . The ~~conversion ratio~~ Corporation shall ~~be subject to adjustment~~ take all such corporate and other actions as from time to time ~~as follows: (i) In case the Corporation shall at any time or from time~~ may be necessary to ~~time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding~~ insure that all shares of Class B Common Stock ~~in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number~~ issuable upon conversion of shares of ~~Common Stock, (C) combine the outstanding shares of~~ Class A Common Stock ~~into a smaller number~~ upon issue will be duly and validly authorized and issued, fully paid and nonassessable and free of ~~shares~~ any preemptive or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so similar rights. In order that the ~~holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the~~ Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, may issue shares of Class B Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the upon conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Class A Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off Corporation will endeavor to comply with all applicable Federal and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offstate securities laws. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Merger Agreement (Enron Corp/Or/), Merger Agreement (Dynegy Inc /Il/)

Conversion. ~~The holders~~ (a) In the event of an Initial Public Offering, Qualified Offering or Qualified Parent Sale by ▇▇▇▇▇ or any of its Affiliates of any entity (other than the Company) of which the Company and its Subsidiaries, taken as a whole, comprise 90% or more of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of~~assets, ~~and by notice to the Corporation from~~revenues or income (such entity, ~~the holders of~~ a ~~majority of the outstanding shares of Series B Preferred Stock~~“Successor Entity”), ~~at any time~~then, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (immediately prior to the consummation of such Initial Public Offering, Qualified Offering or Qualified Parent Sale, all then-outstanding Management Shares shall be automatically canceled and each Management Member shall receive, in exchange for the ~~Recapitalization) to limitations resulting from the available~~ cancellation of his or her Management Shares, such number of shares of ~~Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A~~ common stock (or equivalent class of ~~less than all~~ securities) of the ~~outstanding shares~~ Successor Entity (“Successor Shares”) with an aggregate Fair Market Value equal to the aggregate Fair Market Value of ~~Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of~~ such Management Member’s Management Shares (the ~~Recapitalization~~Successor Shares so disbursed to the Management Members, and Successor Shares acquired by any Management Member thereafter, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above“Converted Shares”) (such cancellation and exchange, the ~~Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"~~“Conversion”). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No All fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock Successor Shares shall be paid in cash ~~for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution~~ to the ~~holders of its Common Stock or other class of securities, or shall offer for subscription pro rata~~ applicable Management Member(s). ▇▇▇▇▇ agrees to (i) provide a written notice to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give Management Members at least ~~20 days'~~ fifteen (15) Business Days prior ~~written notice (the time of mailing of such notice shall be deemed~~ to ~~be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of~~ the date on which ~~(i) the books of the Corporation~~ ▇▇▇▇▇ expects to consummate an Initial Public Offering, Qualified Offering or Qualified Parent Sale in which a Conversion shall ~~close or a record shall be taken for such stock dividend, distribution or subscription rights or~~ occur and (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the ~~happening of such event or the record date therefor~~extent permitted by Applicable Law, ~~whichever is earlier. An adjustment made pursuant~~ take any and all reasonable and necessary actions and comply with all necessary legal and regulatory requirements to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with permit the issuance of ~~any securities shall be deemed to be~~ the ~~sum of the aggregate offering price~~ Converted Shares to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distributionManagement Members; provided, however, that notwithstanding the foregoing, if (x) an Initial Public Offering, Qualified Offering or Qualified Parent Sale in which a Conversion shall occur is to be consummated solely in the ~~event~~ PRC, and (y) the then applicable legal and/or regulatory requirements of the PRC prohibit ▇▇▇▇▇ from issuing the Successor Shares to the Management Members (a ~~distribution of~~ “Non-Conversion Event”), then Management Members shall retain his or her outstanding Management Shares. Any such Successor Entity undertaking an Initial Public Offering or a Qualified Offering shall hereinafter be referred to as an “Offering Entity”, and any shares of ~~capital stock of a Subsidiary of the Corporation~~ such Offering Entity shall hereinafter be referred to as an “Offering Share”. (~~a "Spin-Off"~~b) ~~made to holders of shares of Common Stock, the numerator of such fraction~~ No Management Member shall be obligated to pay any expenses incurred in connection with any Conversion that does not result in the ~~sum~~ receipt or ownership by such Management Member of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distributionTradeable Securities; provided, however, if that the ~~proviso to the preceding sentence applies~~foregoing clause shall not, ~~then such adjustment shall be made~~ and ~~be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding~~ shall not ~~include~~ be deemed or construed to, eliminate or otherwise limit any ~~shares of Common Stock then owned or held by or~~ Management Member’s obligation to bear the costs and expenses for ~~the account of the Corporation~~which such Management Member is responsible as provided in Sections 7(c) and 8(c).

Appears in 2 contracts

Sources: Management Stockholders Agreement, Management Stockholders Agreement (Amc Entertainment Holdings, Inc.)

Conversion. (a) The ~~holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ shares of Series B D Preferred Stock shall be ~~convertible~~ convertible, in whole or in part, at the ~~direction of~~option of the Holders thereof, ~~and~~ at any time prior to the Anniversary Date (as defined below) into a number of shares of Common Stock equal to (A) the aggregate Accrued Liquidation Preference of the Series D Preferred Stock to be converted as of the Conversion Date (as defined below), divided by (B) the Conversion Price (as defined below). In order to convert shares of Series D Preferred Stock, the Holder thereof shall (i) deliver an irrevocable written notice (the "Conversion Notice") to the Corporation ~~from,~~ specifying the ~~holders~~ number of ~~a majority of the outstanding~~ shares of Series B D Preferred Stock to be converted and the name in which such Holder wishes the certificate for shares of Common Stock to be issued, and (ii) surrender the certificate for such shares of Series D Preferred Stock to the Corporation and deliver such additional documents as the Corporation shall reasonably request in connection with such conversion. (b) The shares of Series D Preferred Stock shall be convertible, in whole and not in part, at the option of the Corporation, on the Corporation Conversion Date (as defined below) into a number of shares of Common Stock equal to (A) the aggregate Accrued Liquidation Preference of the Series D Preferred Stock to be converted, divided by (B) the Conversion Price. In order to convert shares of Series D Preferred Stock, ~~at any time, at the office of~~ the Corporation shall deliver a written notice to each Holder. (c) If the Series D Preferred Stock is converted into the Common Stock pursuant to Section 7(a) or ~~any transfer agent for such Series~~Section 7(b), ~~into one thousand~~ the Corporation shall deliver or cause to be delivered as directed by the relevant Holder promptly (~~1,000~~i) certificates representing the full number of validly issued, fully paid and nonassessable shares of Common Stock ~~subject (x)~~ to ~~adjustment from time to time as provided below (as so adjusted~~which such Holder shall be entitled, ~~the "conversion ratio")~~ and (yii) ~~(prior to~~ if less than the ~~consummation of the Recapitalization) to limitations resulting from the available~~ full number of shares of ~~Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of~~ Series B D Preferred Stock ~~shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of~~ evidenced by the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the surrendered certificate or certificates ~~therefor duly endorsed~~is being converted, ~~at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the~~ a new certificate or ~~certificates for shares~~ certificates, of ~~Common Stock are to be issued. The Corporation shall~~like tenor, ~~as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates~~ for the number of shares of ~~Common~~ Series D Preferred Stock ~~to which~~ evidenced by such ~~holder shall be entitled as aforesaid~~surrendered certificate or certificates less the number of shares of Series D Preferred Stock being converted. Such conversion shall be deemed to have ~~been made immediately prior to~~ occurred at the close of business on the ~~date~~ Conversion Date so that as of such ~~Conversion Notice~~ time the rights of the Holder thereof to the shares of Series D Preferred Stock being converted shall cease, except for the right to receive certificates representing shares of Common Stock in accordance herewith, and the ~~person or persons~~ Holder entitled to receive the shares of Common Stock ~~issuable upon~~ issued as a result of such conversion shall be treated for all purposes as having become the ~~recordholder or holders~~ holder of record of such shares of Common Stock ~~as of~~ at such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuancetime. ~~C. No fractional shares shall be issued upon~~ (d) In connection with the conversion of any shares of Series B D Preferred Stock, no fractions of shares of Common Stock shall be issued. If more than one share of Series D Preferred Stock ~~and~~ shall be surrendered for conversion by the same Holder on the same Conversion Date, the number of full shares of Common Stock issuable on conversion thereof shall be computed on the basis of the total number of shares of Series D Preferred Stock so surrendered. If the conversion of any shares of Series D Preferred Stock results in a fraction of a share of Common Stock, the number of shares of Common Stock issuable to ~~be issued~~ the Holder shall be rounded down to the nearest whole ~~share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share~~number. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (~~the time of mailing of such notice shall be deemed to be the time of giving thereof~~e) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the The Corporation shall at all times when the Series D Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued ~~shares of Common Stock~~capital stock, ~~solely~~ for the purpose of effecting the conversion of the ~~shares of~~ Series B D Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding ~~shares of~~ Series B D Preferred Stock, ; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series ~~B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B~~ D Preferred Stock, the Corporation ~~will~~ shall take such corporate action as ~~may, in the opinion of its counsel,~~ may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. ~~F. Any notice required by the provisions of paragraph D~~ (f) The Corporation's obligations to ~~be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid,~~ issue and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding deliver shares of Common Stock upon conversion of Series D Preferred Stock in ~~shares~~ accordance with the terms hereof are absolute and unconditional, irrespective of ~~Common Stock~~any action or inaction by any Holder to enforce the same, ~~(B) subdivide~~ any waiver or consent with respect to any provision hereof, the ~~outstanding shares~~ recovery of ~~Common Stock into a larger number~~ any judgment against any person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by any Holder or any other person of ~~shares~~ any obligation to the Corporation or any violation or alleged violation of ~~Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares~~ law by any Holder or ~~(D) issue by reclassification of the shares of Common Stock~~ any ~~shares of capital stock of the Corporation, then~~other person, and ~~in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder~~ irrespective of any ~~shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or~~ other ~~securities~~ circumstance which might otherwise limit such obligation of the Corporation ~~which such holder would have owned or have been entitled~~ to ~~receive after the happening of~~ any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation Holder in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionStock. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Credit Agreement (Shaw David E), Credit Agreement (Goldman Sachs Group Inc/)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each share of this Series ~~B Preferred Stock shall~~ may be ~~convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock,~~ converted at any time, at the option of the holder thereof, in the manner hereinafter provided, into fully-paid and nonassessable Common Shares, provided, however, that on any redemption of any shares of this Series or any liquidation of the Corporation, the right of conversion shall terminate at the close of business on the full business day next preceding the date fixed for such redemption or for the payment of any amounts distributable on liquidation to the holders of the shares of this Series. The initial conversion rate for shares of this Series shall be one Common Share for each one share of this Series surrendered for conversion, representing an initial conversion price (for purposes of Section 7(g)) of U.S. $6.75 per share of the Corporation's Common Shares (hereinafter, the "Conversion Price"). The applicable conversion rate and Conversion Price from time to time in effect are subject to adjustment as hereinafter provided. (b) Whenever the Conversion Price shall be adjusted as provided in Section 7(g) hereof, the Corporation shall forthwith file at each office designated for the conversion of the shares of this Series, a statement, signed by any of the Chairman of the Board, the President, any Vice President or the Treasurer of the Corporation, showing in reasonable detail the facts requiring such adjustment. The Corporation shall also cause a notice setting forth any such adjustments to be sent by mail, first class, postage prepaid, to each record holder of shares of this Series at his or its address appearing on the stock register. If such notice relates to an adjustment resulting from an event referred to in paragraph 7(g)(vii), such notice shall be included as part of the notice required to be mailed and published under the provisions of paragraph 7(g)(vii) hereof. (c) The right of conversion shall be exercised by the holder by the surrender of the certificates representing shares of this Series to be converted to the Corporation at any time during normal business hours at the office or agency then maintained by it for the conversion of shares of this Series (the "Conversion Office"), accompanied by written notice to the Corporation of such holder's election to convert and, if so required by the Corporation or any conversion agent, by an instrument of transfer, in form satisfactory to the Corporation and to any conversion agent, duly executed by the registered holder or by such holder's duly authorized attorney, and transfer ~~agent~~ tax stamps or funds therefor, if required pursuant to Section 7(k). (d) As promptly as practicable after the surrender for ~~such Series, into~~ conversion of one ~~thousand (1,000) fully paid and nonassessable~~ or more certificates representing any shares of ~~Common Stock subject (x) to adjustment from time to time as~~ this Series in the manner provided ~~below (as so adjusted, the "conversion ratio"~~in Section 7(c) and ~~(y) (prior to~~ the ~~consummation~~ payment in cash of any amount required by the ~~Recapitalization) to limitations resulting from the available number~~ provisions of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A aboveSection 7(k), the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate will deliver or ~~certificates therefor duly endorsed,~~ cause to be delivered at the ~~office~~ Conversion Office to or upon the written order of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees holder of such ~~holder~~shares, a certificate or certificates ~~for~~ representing the number of ~~shares of~~ full Common ~~Stock to which~~ Shares issuable upon such conversion, issued in such name or names as such holder ~~shall be entitled as aforesaid~~may direct, subject to any applicable contractual restrictions and any restrictions imposed by applicable securities laws. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such ~~Conversion Notice~~ surrender of certificates representing shares of this Series in proper order for conversion, and all rights of the holder of such shares as a holder of such shares shall cease at such time, and the person or persons ~~entitled~~ in whose name or names the certificates for such Common Shares are to ~~receive the shares of Common Stock issuable upon such conversion~~ be issued shall be treated for all purposes as having become the ~~recordholder~~ record holder or holders of thereof at such ~~shares of Common Stock as of~~ time; provided, however, that any such ~~date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for~~ surrender on any ~~issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and~~ date when the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the transfer books of the Corporation shall ~~close~~ be closed shall constitute the person or ~~a record shall be taken~~ persons in whose name or names the certificates for such ~~stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place,~~ Common Shares are to be issued as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the record holder or holders ~~of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock~~ thereof for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect purposes immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business next succeeding day on ~~the day upon~~ which such ~~corporate action becomes effective~~stock transfer books are opened. (iie) In Upon conversion in the ~~case the Corporation shall, after the Issue Date, issue shares~~ manner provided in this Section 7 of ~~Common Stock at~~ only a ~~price per share, or securities convertible into or exchangeable for shares~~ portion of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of ~~Common Stock determined~~ this Series represented by ~~multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B)~~ a ~~fraction~~certificate so surrendered for conversion, the ~~numerator~~ Corporation shall issue and deliver or cause to be delivered at the Conversion Office to or upon the written order of ~~which shall be~~ the ~~sum~~ holder of ~~(1)~~ the certificate so surrendered for conversion, at the expense of the Corporation, a new certificate or certificates representing the number of shares of ~~Common Stock outstanding on~~ this Series representing the ~~date on which~~ unconverted portion of the certificate so surrendered, issued in such ~~shares~~ name or ~~Convertible Securities are issued~~ names as such holder may direct, subject to any applicable contractual restrictions and any restrictions imposed by applicable securities laws. (2f) ~~the number of additional~~ All shares of ~~Common Stock issued, or into which the Convertible Securities may convert, and the denominator of~~ this Series which shall ~~be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation~~ have been surrendered for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) conversion as herein provided shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall no longer be deemed to be outstanding and all rights with respect to such shares, including the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional considerationrights, if any, ~~payable~~ to receive notices and to vote, shall forthwith cease and terminate except only the right of the holder thereof to receive Common Shares in exchange therefor. Any shares of this Series so converted shall be retired and canceled and shall not be reissued, and the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or may from time to time ~~after~~ take such appropriate action as may be necessary to reduce the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of authorized shares of ~~Common Stock which are referred to in clause (i) of~~ this ~~paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of~~ Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offaccordingly. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Securities Purchase Agreement (Warburg Pincus Ventures Lp), Securities Purchase Agreement (Sonus Corp)

Conversion. ~~The holders~~ (a) At the option of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred StockHolder, at any time, subject to Section 3(e), the Debentures, in whole or in part, may be converted on the Conversion Date (as defined below) at the ~~office of the Corporation or any transfer agent for such Series~~principal amount thereof, into ~~one thousand (1,000)~~ fully paid and nonassessable shares (calculated as to each conversion to the nearest 1/100 of a share) of Common ~~Stock subject (x) to adjustment from time to time as provided below~~ Stock, including the associated Rights (as ~~so adjusted,~~ defined in the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"Debenture Purchase Agreement)~~. Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed~~, at the ~~office~~ Conversion Price (as defined below), in effect at the time of ~~the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued~~conversion. The ~~Corporation shall, as soon as practicable thereafter, issue and deliver~~ price at ~~such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for~~ which the number of shares of Common Stock to ~~which such holder~~ be delivered shall be ~~entitled~~ determined upon conversion shall be $5.50 per share of Common Stock (the "Conversion Price"). The Conversion Price shall be adjusted in certain instances as ~~aforesaid~~provided in this Debenture, including paragraph (d) of this Section 3. (b) If the Holder elects to convert the Debentures, the Holder shall provide written notice (the "Conversion Notice") to the Company (at the Company's address) which states that the Holder elects to convert such Debenture. ~~Such~~ In order to exchange the securities, the Holder shall surrender the Debentures, duly endorsed or assigned to the Company or in blank. Subject to Section 3(e), each conversion shall be deemed to have been ~~made~~ effected immediately prior to the close of business on the date ~~of such~~ the Holder delivers the Conversion Notice (the "Conversion Date"). If such day is not a business day, and a day on which the ~~person~~ principal national securities exchange or ~~persons entitled~~ market quotation system on which the Common Stock is then listed or admitted for trading is open (a "Trading Day"), then such conversion will be deemed to ~~receive~~ have been effected on the next succeeding Trading Day. As promptly as practicable on or after the Conversion Date, the Company shall issue and deliver the certificates representing the number of full shares of Common Stock, including the associated Rights, issuable upon conversion, together with payment in lieu of any fraction of a share, as provided in Section 3(c). (c) No fractional shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of Debentures. Instead of any fractional share of Common Stock which would otherwise be issuable upon conversion of any Debenture, the Company shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the market price per share of Common Stock at the close of business on the Conversion Date. (d) The Conversion Price shall be subject to the following adjustments: (i) If, on any Conversion Date, the average closing price of the Common Stock during the twenty trading days immediately preceding the Conversion Date is less than the Conversion Price ($5.50, before any anti-dilution adjustments pursuant to this Agreement including Section 3(d)(ii)-(vii)), then the Conversion Price shall be reduced to such average closing price (the "Market Conversion Price"). Adjustments to the Conversion Price pursuant to this subsection (i) are referred to as "Market Adjustments"; all other adjustments to the Conversion Price provided in this Debenture are "Anti-Dilution Adjustments". (ii) In case outstanding shares of ~~Series B Preferred~~ Common Stock ~~and the~~ shall be subdivided into a greater number of shares of Common ~~Stock to be issued~~ Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be ~~rounded down to the nearest whole share~~proportionately reduced, ~~and the holder~~ and, conversely, in case outstanding shares of ~~Series B Preferred~~ Common Stock shall each be ~~paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders~~ combined into a smaller number of ~~its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional~~ shares of ~~stock~~ Common Stock, the Conversion Price in effect at the opening of ~~any class or any other right, or there~~ business on the day following the day upon which such combination becomes effective shall be ~~any capital reorganization~~ proportionately increased, such reduction or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take placeincrease, as the case may be, ~~provided that in the case of any Transaction~~ to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective ~~(x) in the case of any such dividend or distribution,~~ immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close opening of business on the day following the day upon which such ~~corporate action~~ subdivision or combination becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the ~~Corporation~~ Company shall ~~at any time or from time to time after the Issue Date declare, order,~~ pay or make a dividend or other distribution ~~(including, without limitation,~~ on any ~~distribution~~ class of capital stock ~~or other securities or property or rights or warrants to subscribe for securities~~ of the ~~Corporation or any of its Subsidiaries by way of dividend or spin-off), on its~~ Company in Common Stock, ~~other than (A) regular quarterly dividends payable~~ the Conversion Price in ~~cash in an aggregate amount not to exceed 15%~~ effect at the opening of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio business on the day ~~immediately prior to~~ following the ~~record~~ date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced by ~~(2)~~ multiplying such Conversion Price by a ~~fraction,~~ fraction of which the numerator ~~of which~~ shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders number of shares of Common ~~Stock,~~ Stock outstanding at the ~~numerator~~ close of business on the date fixed for such ~~fraction~~ determination and the denominator shall be the sum of ~~the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of~~ such ~~Spin-Off and the Current Market Price of the~~ number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the ~~denominator~~ total number of ~~which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding~~ shares constituting such ~~35th Trading Day. An adjustment made pursuant~~ dividend or other distribution, such reduction to ~~this clause (iii) shall be made upon~~ become effective immediately after the opening of business on the ~~next Business Day~~ day following the date ~~on which any~~ fixed for such ~~dividend~~ determination. (iv) In case the Company shall issue rights or ~~distribution is made and shall be effective retroactively immediately after~~ warrants to all holders of its Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the ~~close~~ Conversion Price, the Conversion Price in effect at the opening of business on the ~~record~~ day following the date fixed for the determination of stockholders entitled to receive such ~~dividend~~ rights or ~~distribution;~~ warrants shall be adjusted to such subscription or purchase price, such reduction to become effective immediately after the opening of business on the day following the date fixed for such determination. (v) In case the Company shall issue Common Stock (other than shares of Common Stock issued upon exercise of rights, options and warrants outstanding as of the date hereof), or rights, options or warrants convertible into, or exchangeable or exercisable for, Common Stock to any third party, or shall reprice or adjust the conversion, exchange or exercise price of rights, options or warrants outstanding as of the date hereof, at or to a price per share of Common Stock less than the Conversion Price, the Conversion Price in effect at the opening of business on the day following the date of such issuance, repricing or adjustment shall be adjusted to such issue, conversion, exchange or exercise price or, in the case of a repricing or adjustment, such conversion, exchange or exercise price as so adjusted, such reduction to become effective immediately after the opening of business on the day following the date of such issuance, repricing or adjustment, as the case may be, provided, ~~however, if the proviso to the preceding sentence applies, then~~ no such adjustment shall be made with respect to: (A) up to 3,833,333 shares of Common Stock to be issued for $3 per share in connection with CHS's acquisition of SIS Distribution Ltd.; (B) up to 2,653,000 shares of Common Stock to be issued for $3 per share in connection with CHS's acquisition of Micro Informatica Corp.; or (C) shares of Common Stock or Preferred Stock issued pursuant to the Rights Agreement. (vi) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness or assets (including securities, but excluding any rights or warrants referred to in clause (iv) of this Section, any dividend or distribution paid in cash out of the retained earnings of the Company and any dividend or distribution referred to in clause (iii) of this Section), the Conversion Price in effect at the opening of business on the date fixed for the determination of stockholders entitled to receive such distribution shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which the numerator shall be the Conversion Price on the date fixed for such determination less the then fair market value of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock and the denominator shall be such Conversion Price, such adjustment to become effective as immediately prior to the opening of business on the day following the date fixed for such determination. (vii) The reclassification of Common Stock into securities including other than Common Stock shall be deemed to involve (A) a distribution of such ~~35th Trading Day after~~ securities other than Common Stock to all holders of Common Stock (and the effective date of such ~~Spin-Off.~~ reclassification shall be deemed to be "the date fixed for the determination of stockholders entitled to receive such distribution" and "the date fixed for such determination" within the meaning of clause (ivvi) ~~For purposes~~ of this ~~paragraph G~~Section), and (B) a subdivision or combination, as the case may be, of the number of shares of Common Stock ~~at any time~~ outstanding ~~shall not include any~~ immediately prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision becomes effective" or "the day upon which such combination becomes effective", as the case may be, and "the day upon which such subdivision or combination becomes effective" within the meaning of clause (ii) of this Section). (e) If the Holder elects to convert the Debenture and deliver a Conversion Notice to the Company which provides for conversion at a Conversion Price which is lower than the initial Conversion Price, as adjusted only for Anti-Dilution Adjustments, then ~~owned or held by or for~~ the ~~account~~ Company shall have the right to redeem the Debenture intended to be converted 60 days after delivery of the ~~Corporation~~Conversion Notice. The Closing of the redemption, if any, shall occur on the sixtieth day following delivery of the Conversion Notice. During the sixty day period the Holder shall have the right at any time to rescind the Conversion Notice by written notice to the Company; and consequently such redemption shall automatically be terminated. (f) Whenever the Conversion Price is adjusted pursuant to Section 3(d): (i) the Company shall compute the adjusted Conversion Price and shall prepare a certificate signed by the Company setting forth the adjusted Conversion Price showing in reasonable detail the facts upon which such adjustment is based; and (ii) a notice stating that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price shall forthwith be prepared, and as soon as practicable after it is prepared (together with a copy of the certificate referred to in clause (i) above), such notice shall be mailed by the Company to all Holders.

Appears in 2 contracts

Sources: Debenture Purchase Agreement (Computer Associates International Inc), Debenture Purchase Agreement (CHS Electronics Inc)

Conversion. (a) The ~~holders~~ Holder agrees, on or prior to June 30, 2013 (the “Termination Date”), subject to the conditions set forth herein, to convert the Holder’s Conversion Amount into the number of Shares set forth on Schedule A, in accordance with the terms and conditions of the ~~Series B Preferred Stock shall have conversion rights~~ Note issued in the name of the Holder. Provided that the Conversion Notice (as ~~follows: A. Each share of Series B Preferred Stock shall be convertible at~~ defined in the ~~direction of, and by notice~~ Note) is received on or prior to the ~~Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time~~Termination Date, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below Closing (as ~~so adjusted~~defined below), the ~~"conversion ratio") and (y) (prior~~ Company shall issue a Warrant to ~~the consummation of the Recapitalization) to limitations resulting from the available~~ purchase that number of shares of Common Stock ~~which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant~~ (the “Warrant Shares”) equal to ~~this paragraph A of less than all~~ 75% of the ~~outstanding shares~~ number of ~~Series B Preferred Stock shall be~~ Shares issued to the Holder in connection with the Conversion, as set forth beside the Holder’s name on ~~a pro rata basis amongst all holders of Series B Preferred Stock. After~~ Schedule A. The Shares and Warrant are collectively referred to herein as the “Securities.” (b) The consummation of the ~~Recapitalization, the number "1,000" in~~ transactions contemplated by this ~~paragraph~~ Agreement shall ~~be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of~~ take place at a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice closing (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("~~Convertible Securities~~Closing") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which ~~such shares~~ the last of the conditions set forth in Section 4 below are fulfilled, but in all cases on or ~~Convertible Securities are issued~~ before June 30, 2013. If the Closing does not occur on or before the Termination Date, the Holder shall retain all rights to convert the Holder’s Notes pursuant to the terms of conditions of the Notes, but this Agreement shall have no further force and ~~(2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert,~~ effect and the ~~denominator of which~~ Holder shall be have no right to receive the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, Warrant or the ~~number~~ Warrant Shares. Upon the Holder’s execution of ~~shares~~ this Agreement prior to the Termination Date, the Holder shall deliver the Conversion Notice and its Note for cancellation and within five business days of ~~Common Stock which the aggregate~~ receipt of the Conversion ~~Price~~ Notice and Note for cancellation, the Company shall deliver to the Holder (i) certificates representing the Shares to which the Holder is entitled as a result of such ~~Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause~~ Conversion and (ii) the Warrant representing the Warrant Shares to which the Holder is entitled as a result of such Conversion. From and after the delivery of the Securities, the Notes shall be ~~made on~~ cancelled. After the ~~next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii)~~Closing, the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment Company shall have ~~been made pursuant~~ no further obligation to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise pay either cash or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than ~~(A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items~~ the Shares and, upon exercise of the ~~Corporation~~Warrant, ~~determined~~ the Warrants Shares, for principal, interest or any other fees due under the Notes to the Holder. If a Holder has lost its Notes and is unable to deliver its Notes, it shall immediately submit an affidavit of loss and indemnity agreement so that the Notes may be replaced and deemed cancelled in accordance with ~~generally accepted accounting principles, during~~ the ~~period~~ terms hereof (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off“Lost Note Affidavit”). (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Conversion Agreement (Protea Biosciences Group, Inc.), Conversion Agreement (Protea Biosciences Group, Inc.)

Conversion. ~~The holders~~ (a) Subject to applicable Law, from the date hereof until the earlier of the ~~Series B Preferred Stock~~ Closing Date and the termination of this Agreement, Purchaser and Seller shall ~~have~~ use reasonable best efforts to cooperate to effect the orderly transition of the Transferred Business from Seller to Purchaser. Purchaser shall deliver to Seller a proposed transition and conversion ~~rights~~ plan (the “Conversion Plan”), which shall also detail the data to be included in the conversion file as ~~follows: A. Each share~~ reasonably agreed by the parties, no later than fifteen (15) calendar days after the date hereof, and Purchaser and Seller shall use reasonable best efforts to finalize the Conversion Plan within sixty (60) calendar days after the date hereof; provided that, for the avoidance of ~~Series B Preferred Stock~~ doubt, the conversion file, including the interim conversion files provided by Seller between the date hereof and the Closing Date as well as the final conversion file provided by Seller on the Closing Date, shall include the Accrued Interest and Fees for each Purchased Loan and each Assumed Deposit shall reflect posted interest and fees. Following completion of the Conversion Plan, each of Purchaser and Seller shall perform their respective responsibilities set forth therein. In connection therewith, Seller and Purchaser shall each as promptly as practicable after the execution of this Agreement designate certain of their respective employees as “transition coordinators”, who will lead the development of the Conversion Plan and will oversee the implementation of such plan. The Conversion Plan shall include an agreed number of copies of the information in the Records, as well as the intervals at which such copies shall be ~~convertible at~~ provided. (b) With respect to any data, including Transferred Business Relationship Information or other non-public personal information of any Branch Customer, transferred to Purchaser’s systems for conversion purposes (and without limiting the ~~direction of~~provisions of this Agreement or the Confidentiality Agreement), prior to Closing: (1) Purchaser shall not use those data for any purposes other than for the conversion and in accordance with the Conversion Plan, shall transfer those data only to personnel involved in the conversion with a need to know such information (and, for the avoidance of doubt, not to front office/customer-facing personnel) and shall implement any “clean team” protocols reasonably requested by Seller and comply with the data security requirements as set forth in Exhibit 7.12(b); (2) Purchaser shall retain and use such data in accordance with applicable Law; (3) except as may be required by applicable Law, Purchaser shall not disclose those data to any person (including any of its Affiliates) without Seller’s prior written consent; (4) if this Agreement is terminated pursuant to Article XI, Purchaser shall immediately, as requested by Seller, destroy or transfer to Seller all those data, except for any such data Purchaser is required to retain under applicable Law, and ~~by notice~~ certify to Seller that it has not retained or has destroyed (as applicable) all those data; and (5) except for any such data Purchaser is required to retain pursuant to a court order or judgment, data in respect of customers that are not, or cease to be, Branch Customers shall, immediately on Seller’s request, be destroyed or transferred to Seller and Purchaser shall certify to Seller that it has not retained or has destroyed (as applicable) all such data. Before providing any Transferred Business Relationship Information or other Branch Customer identifying data to Purchaser, Seller will have the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject right to either (x) ~~to adjustment from time to time as provided below (as so adjusted, the "conversion ratio")~~ conduct an inspection during Purchaser’s normal business hours of Purchaser’s or its vendors’ information security principles and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shallcontrols, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distributionapplicable, or (y) ~~in the case~~ request Purchaser or its vendors to furnish a certificate from a third party information security provider of ~~any~~ Purchaser’s choice, reasonably acceptable to Seller, certifying that Purchaser’s or its vendors’ information security principles and controls are consistent with Seller’s applicable security standards. Purchaser may only provide Transferred Business Relationship Information or other Branch Customer identifying data to its vendors if such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at vendors have executed a ~~price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below)~~ confidentiality agreement with Purchaser and Seller containing terms no less favorable to Seller than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate terms of the ~~Conversion Price~~ Confidentiality Agreement (without regard to any modification thereof pursuant hereto or lapse of ~~such Convertible Securities so issued, would purchase at such Current Market price on such date~~time). ~~An adjustment made~~ Upon Purchaser’s discovery of a data breach experienced by Purchaser or its vendors involving Transferred Business Relationship Information or other Branch Customer identifying data received by Purchaser or its vendors pursuant to this ~~clause (ii)~~ Agreement, Purchaser shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale notify Seller of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding breach as ~~of the date hereof (including~~promptly as practicable following discovery, but ~~not limited to,~~ in no event later than five (5) Business Days thereafter and keep Seller reasonably informed regarding such breach. In the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion event of such ~~Convertible Securities~~ a data breach, Purchaser and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation Seller shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined cooperate in good faith ~~by the Board of Directors of the Corporation~~to take any necessary action, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offincluding customer notifications. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Purchase and Assumption Agreement (Flagstar Bancorp Inc), Purchase and Assumption Agreement (Flagstar Bancorp Inc)

Conversion. ~~The holders of the~~ Series B C Partnership Preferred ~~Stock~~ Units shall ~~have conversion rights~~ be convertible as follows: ~~A. Each share~~ (a) Upon any conversion of ~~Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding~~ shares of Series B C Preferred ~~Stock, at any time, at the office of the Corporation or any transfer agent for such Series,~~ Stock into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock, the General Partner shall cause a number of Series C Partnership Preferred Units equal to the number of such converted shares of Series C Preferred Stock ~~subject (x)~~ to ~~adjustment~~ be converted by the holders thereof into Partnership Common Units. The conversion ratio in effect from time to time for the conversion of Series C Partnership Preferred Units into Partnership Common Units pursuant to this Section 8 shall at all times be equal to, and shall be automatically adjusted as necessary to reflect, the conversion ratio in effect from time to time for the conversion of Series C Preferred Stock into Common Stock. (b) In the event of a conversion of any Series C Partnership Preferred Units, the Partnership shall make a cash payment to the holder thereof equal to the cash payment required to be made by the General Partner to the holder of the shares of Series C Preferred Stock the conversion of which required the conversion of such Series C Partnership Preferred Units. Holders of Series C Partnership Preferred Units at the close of business on a distribution payment record date shall be entitled to receive the distribution payable on such units on the corresponding Distribution Payment Date notwithstanding the conversion thereof following such distribution payment record date and prior to such Distribution Payment Date. Except as provided ~~below (as so adjusted~~above, the ~~"conversion ratio") and (y) (prior to~~ Partnership shall make no payment or allowance for unpaid distributions on converted units or for distributions on the ~~consummation of the Recapitalization) to limitations resulting from the available number of shares of~~ Partnership Common ~~Stock which may be reserved for issuance~~ Units issued upon such conversion~~, provided ,that any~~ . Each conversion ~~pursuant to this paragraph A of less than all of the outstanding shares~~ of Series B C Partnership Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Units into Partnership Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion Units shall be deemed to have been ~~made immediately prior to~~ effected at the ~~close~~ same time and date that the corresponding conversion of ~~business on the date of such Conversion Notice and the person or persons entitled to receive the shares of~~ Series C Preferred Stock into Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuanceis deemed to have been effected. C. (c) No fractional ~~shares~~ Partnership Common Units shall be issued upon conversion of Series C Partnership Preferred Units. Instead of any fractional Partnership Common Units that would otherwise be deliverable upon the conversion of Series C Partnership Preferred Units, the Partnership shall pay to the holder of such converted units an amount in cash equal to the cash payable to a holder of an equivalent number of converted shares of Series B C Preferred Stock ~~and the number~~ in lieu of fractional shares of Common ~~Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share~~Stock. ~~D. In case at any time or from time to time the Corporation shall~~ (d) The Partnership will pay any ~~dividend~~ and all documentary stamp or ~~make any other distribution to the holders~~ similar issue or transfer taxes payable in respect of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the ~~books~~ issue or delivery of ~~the Corporation shall close~~ Partnership Common Units or ~~a record shall be taken for such stock dividend~~other securities or property on conversion or redemption of Series C Partnership Preferred Units pursuant hereto, ~~distribution or subscription rights or~~ and (ii) ~~such reorganization, reclassification, consolidation, merger, sale~~ the issue or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares delivery of Common Stock or other securities or property on conversion or redemption of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to ~~this clause (ii),~~ the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionterms hereof. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Amendment to Limited Partnership Agreement (Home Properties of New York Inc), Amendment No. 33 to the Second Amended and Restated Agreement of Limited Partnership (Home Properties of New York Inc)

Conversion. ~~The holders of~~ (a) Subject to the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each~~ terms and conditions set forth herein, each share of ~~Series B~~ Preferred Stock shall be convertible at into a number of fully paid and non-assessable shares of Common Stock as is equal, subject to Section 7(g), to a fraction, the ~~direction of~~numerator of which shall be the Common Stock Conversion Number and the denominator of which shall be the number of shares of Preferred Stock issued and outstanding on the date of conversion. The Common Stock Conversion Number shall initially be 50,000,000, and shall be subject to adjustment as set forth in this Section. Such conversion right may only be exercised by ~~notice to the Corporation from,~~ the holders of a majority of the outstanding shares of ~~Series B~~ Preferred ~~Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand~~ Stock surrendering certificates (~~1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the~~ "~~conversion ratio~~Surrendered Certificates") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all representing a majority of the outstanding shares of ~~Series B~~ Preferred Stock ~~shall~~ to the Corporation at any time during usual business hours at its principal place of business to be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization~~maintained by it, ~~the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If~~ accompanied by written notice that the holders of a majority of the outstanding shares of ~~Series B~~ Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for elect to convert such ~~Series,~~ shares and ~~shall state therein~~ specifying the name or names (with address) in which ~~the~~ a certificate or certificates for shares of Common Stock are to be ~~issued~~issued and (if so required by the Corporation) by a written instrument or instruments of transfer in form reasonably satisfactory to the Corporation duly executed by the holder or its duly authorized legal representative and transfer tax stamps or funds therefor, if required pursuant to Section 7(j). ~~The Corporation shall~~Upon such surrender, all shares of Preferred Stock shall automatically be converted into Common Stock as provided in this Section. Notwithstanding the foregoing provisions or anything set forth herein or in the Certificate, any shares of Preferred Stock remaining outstanding on December 28, 2004 shall be and be deemed to have been converted into Common Stock at the Conversion Number then in effect. (b) As promptly as practicable after the surrender, as ~~soon~~ herein provided, of shares of Preferred Stock for conversion pursuant to Section 7(a), the Corporation shall deliver to all holders of Preferred Stock a written notice informing such holders (i) that the holders of a majority of the outstanding shares of Preferred Stock have delivered their certificates for such shares to the Corporation in satisfactory form for conversion into Common Shares pursuant to the requirements of this Section 7, (ii) that, as result of such delivery, all outstanding Preferred Stock has been converted into the right to receive Common Stock and (iii) of the Common Stock Conversion Number and instructing such holders to surrender the certificates representing their Preferred Stock to the Corporation in the manner specified in Section 7(a) above in order to receive certificates representing the Common Stock deliverable upon the conversion of their Preferred Stock. As promptly as practicable ~~thereafter~~after the surrender of any certificates representing Preferred Stock in accordance with the requirements of this Section 7, ~~issue and~~ the Corporation shall deliver ~~at such office~~ to ~~such holder,~~ or to upon the ~~nominee or nominees~~ written order of the holder of such ~~holder,~~ shares so surrendered a certificate or certificates ~~for~~ representing the number of fully paid and non-assessable shares of Common Stock to into which such ~~holder shall~~ shares of Preferred Stock may be ~~entitled as aforesaid~~or have been converted in accordance with the provisions of this Section 7. ~~Such~~ Subject to the following provisions of this paragraph and of Section 7(d), such conversion shall be deemed to have been made immediately prior to the close of business on the date that such shares of ~~such Conversion Notice~~ Preferred Stock shall have been surrendered in satisfactory form for conversion, and the ~~person~~ Person or ~~persons~~ Persons entitled to receive the Common Stock deliverable upon conversion of such shares of ~~Common~~ Preferred Stock ~~issuable upon such conversion~~ shall be treated for all purposes as having become the ~~recordholder~~ record holder or holders of such ~~shares of~~ Common Stock ~~as of~~ at such ~~date. The issuance of certificates or shares of Common Stock upon~~ appropriate time, and such conversion ~~of shares of Series B Preferred Stock~~ shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of based on the Common Stock ~~of the Corporation or consolidation or merger of the Corporation with or into another corporation~~Conversion Number in effect at such time; provided, ~~or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety~~however, ~~or there~~ that no surrender shall be ~~a voluntary~~ effective to constitute the Person or ~~involuntary dissolution, liquidation~~ Persons entitled to receive the Common Stock deliverable upon such conversion as the record holder or ~~winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing~~ holders of such ~~notice shall be deemed to be~~ Common Stock while the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the share transfer books of the Corporation shall ~~close or a record~~ be closed (but not for any period in excess of five days), but such surrender shall be ~~taken for~~ effective to constitute the Person or Persons entitled to receive such ~~stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place,~~ Common Stock as the ~~case may be~~record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such share transfer books are open, ~~provided that in the case of any Transaction~~ and such conversion shall be deemed to ~~which paragraph H applies the Corporation~~ have been made at, and shall ~~give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of~~ be based on the Common Stock Conversion Number in effect at, such time on such next succeeding day. (c) To the extent permitted by law, when shares of ~~record shall participate in said dividend~~Preferred Stock are converted, ~~distribution or subscription rights or~~ all dividends declared and unpaid on the Preferred Stock so converted to the date of conversion shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as immediately due and payable and must accompany the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock ~~as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of~~ issued upon such conversion. (d) The Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio Conversion Number shall be subject to adjustment ~~from time to time~~ as follows: (i) In case the Corporation shall at any time or from time to time ~~after the Issue Date~~ (A) pay a dividend or make a ~~distribution,~~ distribution on the outstanding shares of Common Stock in ~~shares~~ capital stock (which, for purposes of ~~Common Stock~~this Section 7(d) shall include, without limitation, any dividends or distributions in the form of options, warrants or other rights to acquire capital stock) of the Corporation, (B) subdivide the outstanding shares of Common Stock into a larger number of ~~shares of Common Stock~~shares, (C) combine the outstanding shares of Common Stock into a smaller number of ~~shares~~ shares, or (D) issue by any shares of its capital stock in a reclassification of the ~~shares of~~ Common Stock ~~any shares of capital stock of the Corporation,~~ then, and in each such case, the ~~conversion ratio~~ Common Stock Conversion Number in effect immediately prior to such event ~~or the record date therefor, whichever is earlier,~~ shall be adjusted ~~so that~~ to equal the ~~holder~~ Common Stock Conversion Number in effect immediately prior to such action multiplied by a fraction, the numerator of ~~any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive~~ which is the number of shares of Common Stock ~~or other securities of the Corporation which such holder would have owned or have been entitled to receive~~ outstanding after the ~~happening~~ action described in clauses (A) through (D) and the denominator of ~~any~~ which is the number of ~~the events described above, had such~~ shares of ~~Series B Preferred~~ Common Stock ~~been surrendered for conversion~~ outstanding immediately prior to ~~the happening of~~ such ~~event or the record date therefor, whichever is earlier~~action. An adjustment made pursuant to this ~~clause (i~~Section 7(d)(i) shall become effective retroactively (xA) in the case of any such dividend or distribution, to a date immediately ~~after~~ following the close of business on the record date for the determination of holders of ~~shares of~~ Common Stock entitled to receive such dividend or ~~distribution,~~ distribution or (yB) in the case of any such subdivision, ~~reclassification~~ combination or ~~combination~~reclassification, at to the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time ~~after the Issue Date declare, order, pay~~ issue shares of Common Stock (or ~~make a dividend~~ securities convertible into or ~~other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe~~ exchangeable for ~~securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its~~ Common Stock, or any options, warrants or other rights to acquire shares of Common Stock) for a consideration per share less than the Current Market Price per share of Common Stock then in effect at the record date or issuance date, as the case may be (the "Date"), referred to in the following sentence (treating the consideration per share of any security convertible or exchangeable or exercisable into Common Stock as equal to (A) ~~regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items~~ the sum of the ~~Corporation~~price for such security convertible, ~~determined in accordance with generally accepted accounting principles~~exchangeable or exercisable into Common Stock plus any additional consideration payable (without regard to any anti-dilution adjustments) upon the conversion, ~~during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date~~ exchange or exercise of such ~~dividend is paid or~~ security into Common Stock divided by (B) ~~dividends or distributions~~ the number of shares of Common Stock ~~which are referred to in clause (i) of this paragraph G~~initially underlying such convertible, exchangeable or exercisable security), then, and in each such case, the ~~conversion ratio~~ Common Stock Conversion Number in effect shall be adjusted ~~so that~~ by multiplying the ~~holder~~ Common Stock Conversion Number in effect on the day immediately prior to the Date by a fraction (x) the numerator of ~~each share of Series B Preferred Stock~~ which shall be ~~entitled to receive, upon~~ the ~~conversion thereof,~~ sum of the number of shares of Common Stock ~~determined by multiplying~~ outstanding on the Date plus the number of additional shares of Common Stock issued or to be issued (1or the maximum number into which such convertible or exchangeable securities initially may convert or exchange or for which such options, warrants or other rights initially may be exercised) and (y) the ~~applicable conversion ratio~~ denominator of which shall be the sum of the number of shares of Common Stock outstanding on the ~~day~~ Date plus the number of shares of Common Stock which the aggregate consideration for the total number of such additional shares of Common Stock (or securities convertible into or exchangeable for Common Stock, or any options, warrants or other rights to acquire shares of Common Stock) plus the aggregate amount of any additional consideration initially payable (without regard to any anti-dilution adjustments) upon such conversion, exchange or exercise of such security into Common Stock would purchase at the Current Market Price per share of Common Stock on the Date. Such adjustment shall be made whenever such shares, securities, options, warrants or other rights are issued, and shall become effective retroactively to a date immediately ~~prior~~ following the close of business (i) in the case of issuance to stockholders of the Corporation, as such, on the record date ~~fixed~~ for the determination of stockholders entitled to receive such ~~dividend~~ shares, securities, options, warrants or ~~distribution~~ other rights and (ii) in all other cases, on the date ("issuance date") of such issuance; provided that: (A) the determination as to whether an adjustment is required to be made pursuant to this Section 7(d)(ii) shall be made upon the issuance of such shares or such convertible or exchangeable securities, options, warrants or other rights; (B) if any convertible or exchangeable securities, options, warrants or other rights (or any portions thereof) which shall have given rise to an adjustment pursuant to this Section 7(d)(ii) shall have expired or terminated without the exercise thereof and/or if by reason of the terms of such convertible or exchangeable securities, options, warrants or other rights there shall have been an increase or increases or decrease or decreases, with the passage of time or otherwise, in the price payable upon the exercise or conversion thereof, then the Common Stock Conversion Number hereunder shall be readjusted (2but to no greater extent than originally adjusted) on the basis of (x) eliminating from the computation any additional shares of Common Stock corresponding to such convertible or exchangeable securities, options, warrants or other rights as shall have expired or terminated, (y) treating the additional shares of Common Stock, if any, actually issued or issuable pursuant to the previous exercise of such convertible or exchangeable securities, options, warrants or other rights as having been issued for the consideration actually received and receivable therefor and (z) treating any of such convertible or exchangeable securities, options, warrants or other rights which remain outstanding as being subject to exercise or conversion on the basis of such exercise or conversion price as shall be in effect at the time of adjustment; and (C) no adjustment in the Common Stock Conversion Number shall be made pursuant to this Section 7(d)(ii) as a ~~fraction~~result of any issuance of securities by the Corporation in respect of which an adjustment to the Common Stock Conversion Number is made pursuant to Section 7(d)(i). (iii) In the case the Corporation, at any time or from time to time, shall take any action affecting its Common Stock similar to or having an effect similar to any of the actions described in any of Section 7(d)(i) and Section 7(d)(ii), or Section 7(h) (but not including any action described in any such Section) and the Board of Directors of the Corporation in good faith determines that it would be equitable in the circumstances to adjust the Common Stock Conversion Number as a result of such action, then, and in each such case, the ~~numerator~~ Common Stock Conversion Number shall be adjusted in such manner and at such time as the Board of Directors of the Corporation in good faith determines would be equitable in the circumstances (such determination to be evidenced in a resolution, a certified copy of which shall be mailed to the ~~then Current Market Price per share~~ holders of ~~Common Stock for~~ the ~~period of 20 Trading Days preceding such record date~~Preferred Stock). (iv) Notwithstanding anything herein to the contrary, ~~and the denominator of which~~ no adjustment under this Section 7(d) shall be ~~such Current Market Price per share~~ made upon the grant of ~~Common Stock for~~ options to employees or directors of the ~~period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith~~ Corporation pursuant to benefit plans approved by the Board of Directors of the ~~Corporation, a certified resolution with respect to which shall be mailed to each holder~~ Corporation or upon the issuance of shares of ~~Series B Preferred Stock~~Common Stock upon exercise of such options if the exercise price thereof was not less than the Market Price of the Common Stock on the date such options were granted. (e) If the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, and shall thereafter and before the distribution to stockholders thereof legally abandon its plan to pay or deliver such dividend or distribution~~; provided~~, ~~however, that~~ then thereafter no adjustment in the Common Stock Conversion Number then in effect shall be required by reason of the taking of such record. (f) Upon any increase or decrease in the Common Stock Conversion Number, then, and in each such case, the Corporation promptly shall deliver to each registered holder of Preferred Stock at least 10 Business Days prior to effecting any of the foregoing transactions a certificate, signed by the President or a Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation, setting forth in reasonable detail the event requiring the adjustment and the method by which such adjustment was calculated and specifying the increased or decreased Common Stock Conversion Number then in effect following such adjustment. (g) No fractional shares or scrip representing fractional shares shall be issued upon the conversion of ~~a distribution~~ any shares of Preferred Stock. If more than one share of Preferred Stock shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of ~~capital stock~~ Preferred Stock so surrendered. If the conversion of ~~a Subsidiary of the Corporation (a "Spin-Off") made to holders of~~ any share or shares of ~~Common Stock~~Preferred Stock results in a fraction, ~~the numerator of~~ an amount equal to such fraction ~~shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and~~ multiplied by the Current Market Price of the ~~number~~ Common Stock on the Business Day preceding the day of conversion shall be paid to such holder in cash by the Corporation. (h) In case of any capital reorganization or reclassification or other change of outstanding shares ~~(or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share~~ of Common Stock ~~for~~ (other than a change in par value, or from par value to no par value, or from no par value to par value), or in case of any consolidation or merger of the ~~period~~ Corporation with or into another Person (other than a consolidation or merger in which the Corporation is the resulting or surviving Person and which does not result in any reclassification or change of ~~20 Trading~~ outstanding Common Stock), or in case of any sale or other disposition to another Person of all or substantially all of the assets of the Corporation (any of the foregoing, a "Transaction"), the Corporation, or such successor or purchasing Person, as the case may be, shall execute and deliver to each holder of Preferred Stock at least 10 Business Days ~~preceding such 35th Trading Day and~~ prior to effecting any of the ~~denominator~~ foregoing Transactions a certificate that the holder of ~~which shall be the current market price per~~ each share of Preferred Stock then outstanding shall have the ~~Common~~ right thereafter to convert such share of Preferred Stock ~~for~~ into the ~~period~~ kind and amount of ~~20 Trading Days proceeding~~ shares of stock or other securities (of the Corporation or another issuer, the "Other Securities")) or property or cash receivable upon such ~~35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening~~ Transaction by a holder of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at into which such share of Preferred Stock could have been converted immediately prior to such Transaction. Such certificate shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 7. If, in the case of any ~~time outstanding shall not include any shares~~ such Transaction, the Other Securities, cash or property receivable thereupon by a holder of Common Stock ~~then owned~~ includes shares of stock or ~~held by~~ other securities of a Person other than the successor or ~~for the account of~~ purchasing Person and other than the Corporation., which controls or is controlled by

Appears in 2 contracts

Sources: Merger Agreement (Pease Oil & Gas Co /Co/), Merger Agreement (Pease Oil & Gas Co /Co/)

Conversion. ~~The~~ Class E Partnership Preferred Units shall be convertible by the holders ~~of the Series B Preferred Stock shall have conversion rights~~ thereof as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at (1) Upon any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of ~~Series B~~ Class E Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, ~~solely for~~ the ~~purpose~~ General Partner shall cause a number of ~~effecting~~ Class E Partnership Preferred Units equal to the ~~conversion~~ number of ~~the~~ such converted shares of ~~Series B~~ Class E Preferred ~~Stock, such number of its shares of~~ Stock to be converted by the holders thereof into Partnership Common ~~Stock as shall~~ Units. The conversion ratio in effect from time to time ~~be sufficient to effect~~ for the conversion of Class E Partnership Preferred Units into Partnership Common Units pursuant to this Section 9 shall at all ~~outstanding shares of Series B Preferred Stock~~times be equal to, and ~~if at any time the number of authorized but unissued shares of Common Stock~~ shall ~~not~~ be ~~sufficient~~ automatically adjusted as necessary to ~~effect~~ reflect, the conversion ~~of all then outstanding shares of Series B Preferred Stock, then~~ ratio in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment effect from time to time ~~as follows:~~for the conversion of Class E Preferred Stock into Common Stock. (i2) ~~In case~~ If the ~~Corporation~~ Previous General Partner shall ~~at any time or from time to time~~ after the Issue Date (Ai) pay a dividend or make a ~~distribution,~~ distribution on the ~~outstanding shares of Common~~ Class E Preferred Stock in shares of Common Stock, (Bii) subdivide ~~the~~ its outstanding ~~shares of Common~~ Class E Preferred Stock into a ~~larger~~ greater number of ~~shares of Common Stock~~shares, (Ciii) combine ~~the~~ its outstanding ~~shares of Common~~ Class E Preferred Stock into a smaller number of ~~shares~~ shares, or (Div) issue ~~by reclassification of the shares of Common Stock~~ any shares of capital stock by reclassification of its outstanding Class E Preferred Stock, then the ~~Corporation~~Partnership shall contemporaneously do the same with respect to the Class E Partnership Preferred Units. If the Previous General Partner shall after the Issue Date issue rights, ~~then~~options or warrants to all holders of Class E Preferred Stock entitling them to subscribe for or purchase Class E Preferred Stock, ~~and in each such case~~then upon the subscription for or purchase of shares of Class E Preferred Stock pursuant thereto, the ~~conversion ratio~~ Previous General Partner shall contribute the proceeds from such subscription or purchase to the Partnership in ~~effect immediately prior~~ exchange for a number of Partnership Preferred Units equal to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Class E Preferred Stock ~~been surrendered~~ so subscribed for ~~conversion immediately prior to the happening of such event~~ or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effectivepurchased. (ii3) ~~In the case the Corporation shall, after the Issue Date, issue shares~~ Each conversion of Class E Partnership Preferred Units into Partnership Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities Units shall be deemed to be have been effected at the ~~sum~~ same time and date that the corresponding conversion of ~~the aggregate offering price~~ Class E Preferred Stock into Common Stock is deemed to ~~the public~~ have been effected. (~~before deduction~~ 4) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or ~~sale~~ delivery of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation Partnership Common Units upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionClass E Partnership Preferred Units pursuant hereto. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Limited Partnership Agreement (Aimco Properties Lp), Limited Partnership Agreement (Aimco Properties Lp)

Conversion. ~~The holders~~ (i) Each outstanding share of ~~the Series B Preferred~~ Class A Common Stock shall ~~have conversion rights as follows: A. Each~~ automatically convert into one share of ~~Series B Preferred~~ Class C Common Stock ~~shall be convertible at~~ immediately upon (A) the ~~direction of, and by notice~~ transfer thereof to any Person other than a Permitted Transferee who is also a Principal or a Related Party or (B) the ~~Corporation from, the holders~~ occurrence of a ~~majority~~ Class B Event, in either case with no further action on the part of any holder thereof. (ii) Upon the ~~outstanding~~ conversion of any shares of ~~Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of~~ Class A Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A clause (i) above, the ~~Corporation~~ holder thereof shall ~~notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall~~ promptly surrender the certificate or certificates ~~therefor~~ representing the shares of Class A Common Stock so converted, duly endorsed, at to the ~~office~~ Secretary of the Corporation or of to any transfer agent for the Class A Common Stock. If so required by the Corporation, any certificate for shares surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder of such ~~Series~~shares or the duly authorized representative of such holder. Upon receipt by the Secretary or transfer agent of the foregoing certificate or certificates and, ~~and~~ if required, instruments of transfer, the Corporation shall ~~state therein~~ cause to be issued to the ~~name or names in which~~ holder who surrendered the certificate or certificates ~~for~~ representing shares of Class A Common Stock ~~are~~ or such holder's nominee or nominees, a certificate or certificates representing either (A) the appropriate number of shares of Class C Common Stock (in the case of a conversion pursuant to ~~be issued. The Corporation shall~~clause (i)(A) above) or (B) one share of Class C Common Stock for each share of Class A Common Stock represented by such surrendered certificate (in the case of a conversion pursuant to clause (i)(B) above), ~~as soon as practicable thereafter,~~ and shall issue and deliver ~~at such office~~ to such holder, or ~~to the~~ such holder's nominee or ~~nominees~~ nominees, such certificate or certificates as well as, in the case of ~~such holder~~a conversion pursuant to clause (i)(A) above, a certificate or certificates ~~for the number of~~ representing any shares of Class A Common Stock ~~to which~~ represented by such ~~holder shall be entitled as aforesaid~~surrendered certificate that were not transferred in a manner that effected a conversion thereof into shares of Class C Common Stock. Such conversion shall be deemed to have been ~~made immediately prior to~~ effected at the close of business on the date of the occurrence of the event giving rise to such ~~Conversion Notice~~ conversion, and the ~~person~~ Person or ~~persons~~ Persons entitled to receive the shares of Class C Common Stock issuable upon such conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such shares of Class C Common Stock as on that date. (iii) A number of ~~such date. The issuance of certificates or~~ shares of Class C Common Stock equal to the number of shares of Class A Common Stock outstanding from time to time shall be set aside and reserved for issuance upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Class A Common Stock into ~~a larger number of shares of~~ Class C Common Stock~~, (C) combine the outstanding shares~~ . Shares of Class A Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio converted pursuant to clause (i) shall be retired and may not be reissued. Shares of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but Class A Common Stock shall not ~~limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of~~ be convertible into shares of Class B Common Stock. Shares of Class B Common Stock ~~pursuant thereto~~ shall not be ~~deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration~~ convertible into shares of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares class of Common Stock~~, the numerator~~ . Shares of ~~such fraction~~ Class C Common Stock shall not be ~~the sum~~ convertible into shares of ~~the Current Market Price per share~~ any other class of Common Stock. Shares of Class D Common Stock ~~for the period~~ shall not be convertible into shares of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share any other class of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffStock. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Agreement and Plan of Restructuring and Merger (Liberty Media Corp /De/), Agreement and Plan of Restructuring and Merger (New Unitedglobalcom Inc)

Conversion. (a) The ~~holders~~ Holder may elect in writing to convert all or designated part of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ principal amount of ~~Series B Preferred Stock~~ the Notes at any time before the Note is paid in full. Before the Holder shall be ~~convertible at the direction of, and by notice~~ entitled to ~~the Corporation from~~convert this Note into Shares, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock Holder shall surrender ~~the certificate or certificates therefor~~ this Note, duly endorsed, at the office of the ~~Corporation or~~ Maker, and shall give written notice to the Maker at its principal corporate office of ~~any transfer agent for such Series,~~ the election to convert the same and shall state therein the name or names in which the certificate or certificates for ~~shares of Common Stock~~ the Shares are to be ~~issued.~~ issued (the "Notice of Conversion"). (b) The ~~Corporation shall~~Maker shall have one (1) business day from its receipt of the Notice of Conversion to elect to prepay the Note by notifying Holder in writing of such election and, ~~as soon as practicable~~ within five (5) business days thereafter, delivering to Holder the payment set forth in Paragraph 12 below. In the event that Maker prepays the Note, ▇▇▇▇▇▇'s right to convert the Note shall terminate, and his Notice of Conversion shall not be effective. (c) In the event that the Maker does not prepay as set forth in subparagraph (b), it shall promptly issue and deliver ~~at such office~~ to ~~such holder~~the Holder, or to such persons at the ~~nominee or nominees of such holder~~address specified by the Holder, a certificate or certificates for the ~~number of shares of Common Stock~~ Shares to which ~~such holder shall be entitled as aforesaid~~the Holder is entitled. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of ~~such Conversion Notice~~ surrender of this Note, and the ~~person or~~ persons entitled to receive the ~~shares of Common Stock~~ Shares issuable upon such conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such ~~shares of Common Stock~~ Shares as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of ~~any shares of Series B Preferred Stock~~ this Note, and the number of ~~shares of Common Stock~~ Shares to be issued shall be rounded down to the nearest whole share. If the conversion is not canceled by prepayment, ~~and~~ the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification outstanding portion of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained principal balance designated by the ~~Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall~~ Holder will be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give converted into Shares at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price $0.22 per share, ~~or securities convertible~~ and accrued and unpaid interest will be converted into ~~or exchangeable~~ Shares at the market price based on the average closing price for ~~shares of Common Stock~~ the five (~~"Convertible Securities"~~5) ~~having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive~~ trading days prior to ~~such date), then, and in each such case,~~ the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Convertible Note (Sedona Corp), Convertible Note (Sedona Corp)

Conversion. ~~The holders~~ In the event that the LLC determines to consummate a Qualified Initial Public Offering, the Board of ~~the Series B Preferred Stock~~ Managers shall have ~~conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at~~ the ~~direction of~~power and authority, ~~and by notice~~ to incorporate the ~~Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation~~ LLC or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other ~~remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate~~ action as ~~may~~it may deem advisable, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) ~~regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items~~ dissolving the LLC, creating one or more subsidiaries of the ~~Corporation, determined in accordance with generally accepted accounting principles, during~~ newly formed corporation and transferring to such subsidiaries any or all of the ~~period~~ assets of the LLC (~~treated as one accounting period~~including by merger) ~~commencing on July 1, 1998, and ending on the date such dividend is paid~~ or (B) ~~dividends or distributions~~ causing the Members to exchange their Units for common stock of the newly formed corporation. In connection with any such transaction, the Members shall receive, in exchange for their respective Units, shares of ~~Common Stock which are referred~~ common stock of such corporation or its subsidiaries having the same relative economic interest in such corporation or its subsidiaries as is set forth in this Agreement, subject to ~~in clause (i)~~ any modifications required solely as a result of ~~this paragraph G~~the conversion to corporate form. At the time of such transaction, ~~then~~the Members shall, and ~~in each such case~~hereby agree to, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, take any and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith all actions deemed reasonably necessary and appropriate by the Board of ~~Directors of~~ Managers to effect such transaction, including entering into a stockholders’ agreement providing for (i) the ~~Corporation~~restrictions on Transfer set forth in this Agreement; provided that such restrictions shall not apply to sales in broadly disseminated public offerings, ~~a certified resolution~~ to sales in accordance with ~~respect~~ Rule 144 under the Securities Act or to ~~which shall be mailed to each holder of shares of Series B Preferred Stock)~~ sales following the consummation of such ~~dividend or distribution; provided, however, that in the event of a distribution of~~ Qualified Initial Public Offering and (ii) an agreement to vote all shares of capital stock held by them to elect the Board of Managers as the directors of the new corporation in accordance with this Agreement. Prior to consummating any such transaction, the Members shall approve the proposed forms of a ~~Subsidiary~~ certificate of incorporation, by-laws, stockholders’ agreement and any other governing documents proposed to be established for such corporation and its subsidiaries, if any, all of which shall, as nearly as practicable, reflect the rights and obligations of the ~~Corporation (a "Spin-Off") made~~ Members under this Agreement and comparable agreements applicable to ~~holders of shares of Common Stock, the numerator of such fraction shall be the sum~~ any subsidiary as of the ~~Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective~~ date of such ~~Spin-Off and~~ transaction. Prior to effecting any conversion under this Section 9.5, the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which Class A Members shall be ~~the current market price per share of the Common Stock for the period of 20 Trading Days proceeding~~ given sufficient time to effect reasonable tax planning and other internal restructuring as such ~~35th Trading Day. An adjustment made pursuant~~ Class A Member shall deem to ~~this clause (iii) shall~~ be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offreasonably necessary. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 2 contracts

Sources: Limited Liability Company Agreement (Hughes Communications, Inc.), Limited Liability Company Agreement (HNS-India VSAT, Inc.)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice~~ (a) Subject to the ~~Corporation from, the holders~~ provisions of ~~a majority~~ this Article III and of ~~the outstanding shares of Series B Preferred Stock, at any time~~Article I, at the ~~office~~ Effective Time, by virtue of the ~~Corporation or~~ Merger and without any ~~transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted,~~ action on the ~~"conversion ratio") and (y) (prior to the consummation~~ part of the ~~Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion~~holders thereof, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of ~~Common Stock issuable upon such conversion~~ each of Acquisition and MDJB shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time converted as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification Each of the ~~shares of Common Stock any~~ shares of capital stock of ~~the Corporation, then,~~ Acquisition issued and ~~in each such case, the conversion ratio in effect~~ outstanding immediately prior to ~~such event or~~ the ~~record date therefor~~Effective Time shall remain outstanding; (ii) Subject to the provisions of Section 3.3, ~~whichever is earlier~~each share of MDJB Common Stock, no par value per share (collectively, the "Shares") issued and outstanding immediately prior to the Effective Time shall be ~~adjusted so that~~ converted into the ~~holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled~~ right to receive the ~~number~~ Per Share Stock Consideration; and (iii) Each outstanding share of MDJB Common Stock as to which a written notice of election to dissent is filed in accordance with Title 7-113 of the CBCA at or prior to the Stockholders' Meeting and not withdrawn at or prior to the Stockholders' Meeting and which is not voted in favor of the Merger shall not be converted into or represent a right to receive ▇▇▇▇▇▇▇ Common Stock hereunder unless and until the holder shall have failed to perfect, or shall have effectively withdrawn or lost his or her right to appraisal of and payment for his or her MDJB Common Stock under such Title, at which time his or her shares shall be converted into ▇▇▇▇▇▇▇ Common Stock as set forth in Section 3.1(a) (ii). All such shares of MDJB Common Stock as to which such a written demand for appraisal is so filed and not withdrawn at or prior to the time of such vote and which are not voted in favor of the Merger are herein called "Dissenting Stock." MDJB shall give ▇▇▇▇▇▇▇ prompt notice upon receipt by MDJB of any written demands for appraisal rights or withdrawal of such demands, and MDJB shall give ▇▇▇▇▇▇▇ the opportunity to direct all negotiations and proceedings with respect to such demands. MDJB shall not voluntarily make any payment with respect to any demands for appraisal rights and shall not, except with the prior written consent of ▇▇▇▇▇▇▇, settle or offer to settle any such demands. Each holder of MDJB Common Stock who becomes entitled, pursuant to provisions of said Title 7-113, to payment for his or her shares of MDJB Common Stock under the provisions of said title shall receive the fair market value (as determined pursuant to Title 7-113) for each share of Dissenting Stock in payment therefor from ▇▇▇▇▇▇▇ and such shares of MDJB Common Stock shall be canceled. (b) The calculations of the computations required by this Article III shall be prepared by ▇▇▇▇▇▇▇ prior to the Closing date and shall be set forth in a statement furnished to MDJB not later than one day prior to Closing showing in reasonable detail the manner of calculation. (c) Each of the shares of MDJB capital stock held by ▇▇▇▇▇▇▇ or any of its wholly owned Subsidiaries or MDJB or any of its wholly owned Subsidiaries shall be canceled and retired at the Effective Time and no consideration shall be issued in exchange therefor. (d) Subject to the terms of Section 3.2 hereof, each holder of shares of MDJB Common Stock ~~or other securities of~~ exchanged pursuant to the ~~Corporation which such holder~~ Merger who would ~~have owned or~~ otherwise have been entitled to receive a fraction of a share of ▇▇▇▇▇▇▇ Common Stock (after taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of ▇▇▇▇▇▇▇ Common Stock multiplied by the ~~happening~~ closing price of the ▇▇▇▇▇▇▇ Common Stock on the trading day immediately preceding the Closing as reported by the American Stock Exchange (the "Fractional Share Consideration"). No such holder will be entitled to dividends, voting rights or any other rights as a stockholder in respect of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effectivefractional share. (iie) In At the ~~case~~ Effective Time, the ~~Corporation shall~~stock transfer books of MDJB shall be closed as to holders of MDJB Common Stock and no transfer of MDJB Common Stock by any such holder shall thereafter be made or recognized. If, after the ~~Issue Date~~Effective Time, ~~issue shares~~ certificates are properly presented in accordance with Article IV of ~~Common Stock at a price per share,~~ this Agreement to ▇▇▇▇▇▇▇'▇ stock transfer agent or ~~securities convertible into or exchangeable for shares of Common Stock~~ such other agent as the parties may agree (the "~~Convertible Securities~~Exchange Agent"~~) having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date~~), ~~then, and in each~~ such ~~case, the conversion ratio~~ certificates shall be ~~adjusted so that~~ canceled and, subject to the ~~holder~~ terms of ~~each share of Series B Preferred Stock shall be entitled to receive~~Section 3.2 and Article 7A hereof, ~~upon the conversion thereof,~~ exchanged for certificates representing the number of whole shares of ~~Common Stock determined by multiplying (A)~~ ▇▇▇▇▇▇▇ and a check representing the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of ~~additional consideration~~cash for fractional shares, if any, ~~payable to~~ into which the ~~Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of~~ MDJB Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment represented thereby was converted in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionMerger. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Merger Agreement (Whitman Medical Corp)

Conversion. The ~~holders~~ shares of ~~the~~ Series B A-[●] Preferred Stock shall ~~have conversion rights as follows: A. Each share of Series B Preferred Stock shall~~ not be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject~~ or any other securities of the Corporation. Notwithstanding the foregoing, on the second (x2nd) ~~to adjustment from time to time as provided below~~ business day after the date that the Corporation receives the Requisite Stockholder Approval (as ~~so adjusted~~defined in the Credit Agreement), each share of Series A-[●] Preferred Stock shall convert into a number of shares of Series B-1 Preferred Stock, having the ~~"conversion ratio")~~ terms and ~~(y) (prior~~ conditions set forth in Exhibit B to the ~~consummation of the Recapitalization) to limitations resulting from the available~~ Securities Purchase Agreement, initially convertible into a number of shares of Common Stock ~~which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant~~ equal to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock represented by the Series A-[●] Liquidation Value, provided that the holders of Series A-[●]Preferred Stock shall have the option to ~~which such holder~~ request, in writing, that any portion of the Series A-[●]Preferred Stock not be so converted. With respect to any shares of Series A-[●]Preferred Stock that remain outstanding after the Corporation receives the Requisite Stockholder Approval (as defined in the Credit Agreement), the Corporation shall be ~~entitled as aforesaid. Such conversion shall be deemed~~ required to ~~have been made immediately prior to the close of business on the date of~~ convert such ~~Conversion Notice and the person or persons entitled to receive the~~ shares into shares of ~~Common~~ Series B-1 Preferred Stock ~~issuable upon such conversion shall~~ pursuant to this Section 7 within five (5) business days of receiving a written request (which may be ~~treated for all purposes as~~ by electronic mail) from the ~~recordholder or~~ holders of such ~~shares of Common Stock as of such date~~shares. The ~~issuance of certificates or shares of Common~~ Series B-1 Preferred Stock ~~upon conversion of shares of~~ shall have substantively similar terms to the Series B A-[●]Stock, except that the Series B-1 Preferred Stock shall be ~~made without charge for~~ convertible into Common Stock, and include conversion and antidilution terms related thereto, shall provide the holders thereof certain pre-emptive rights to participate in future offerings of equity securities by the Corporation and shall include a provision that limits the beneficial ownership of the holders thereof (together with any ~~issue, stamp or other similar tax in respect~~ group of which such ~~issuance. C. No fractional shares shall be issued upon conversion~~ holders are a member) to no more than 49.9% (the “Beneficial Ownership Limitation”) of ~~any shares of Series B Preferred Stock and~~ the number of shares of Common Stock ~~to be~~ then issued ~~shall be rounded down~~ and outstanding, all as set forth in Exhibit B to the ~~nearest whole share~~Securities Purchase Agreement. Notwithstanding the foregoing, ~~and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time~~ by written notice to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, ~~then, in~~ any ~~one or more of said cases~~ holder may amend the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution Beneficial Ownership Limitation percentage with respect to ~~which shall be mailed~~ such holder to ~~each holder of shares of Series B Preferred Stock) of such dividend~~ any percentage that is lower than or ~~distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made~~ equal to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off49.9%. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Securities Purchase Agreement (Eos Energy Enterprises, Inc.)

Conversion. ~~The holders~~ (a) Prior to the Spin-off, and subject to the provisions of this paragraph 7, the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred~~ New Tracking Stock shall be convertible at the ~~direction of, and by notice to the Corporation from,~~ election of the holders ~~of a majority of the outstanding shares of Series B Preferred Stock~~thereof, at any ~~time, at the office of the Corporation or any transfer agent for such Series,~~ time into ~~one thousand (1,000)~~ fully paid and ~~nonassessable~~ non-assessable shares of Wireless Group Common Stock; provided that such conversion is in respect to all (and not less than all) shares of New Tracking Stock. In the event of such conversion, each outstanding share of New Tracking Stock shall be convertible into five hundred (500) shares of Wireless Group Common Stock (the "Conversion Rate") as of the date of the conversion subject ~~(x)~~ to adjustment from time to time ~~as provided below~~ pursuant to paragraph 7(e). (~~as so adjusted~~i) In order to exercise the conversion privilege, ~~the "conversion ratio"~~all holder(s) ~~and (y) (prior to the consummation~~ of the ~~Recapitalization) to limitations resulting from the available number of~~ shares of ~~Common~~ New Tracking Stock ~~which may~~ to be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock converted shall surrender the ~~certificate or certificates therefor duly endorsed,~~ certificate(s) representing such shares at the ~~office~~ principal executive offices of the ~~Corporation~~ corporation, with a written notice of election to convert completed and signed. Unless the shares issuable on conversion are to be issued in the same name as the name in which such shares of New Tracking Stock are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the corporation, duly executed by the holder or of the holder's duly authorized attorney, and an amount sufficient to pay any transfer ~~agent for such Series, and shall state therein~~ or similar tax. (ii) As promptly as practicable after the ~~name or names in which~~ surrender by the ~~certificate or~~ holder(s) of all certificates for shares of ~~Common~~ New Preferred Stock ~~are to be issued. The Corporation shall~~as aforesaid, ~~as soon as practicable thereafter,~~ the corporation shall issue and shall deliver ~~at such office~~ to such ~~holder~~holder(s), or on the holder's or holders' written order to the ~~nominee~~ holder's or ~~nominees of such holder~~holders' transferee(s), a certificate or certificates for the whole number of shares of Wireless Group Common Stock issuable upon the conversion of such shares in accordance with the provisions of this paragraph 7. (iii) Each conversion of shares of New Tracking Stock pursuant to ~~which such holder shall be entitled as aforesaid. Such conversion~~ this paragraph 7 shall be deemed to have been ~~made~~ effected immediately prior to the close of business on the date on which the certificates for shares of New Tracking Stock shall have been surrendered and such ~~Conversion Notice~~ notice received by the corporation as aforesaid, and the person in whose name or ~~persons entitled to receive the~~ names any certificate or certificates for shares of Wireless Group Common Stock shall be issuable upon such conversion shall be ~~treated for all purposes as~~ deemed to have become the ~~recordholder or holders~~ holder of ~~such~~ record of the shares of Wireless Group Common Stock ~~as of~~ represented thereby at such ~~date. The issuance of certificates or shares of Common Stock upon~~ time on such date and such conversion ~~of shares of Series B Preferred Stock~~ shall be ~~made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the~~ into a number of shares of Wireless Group Common Stock in respect of the shares of New Tracking Stock being converted as determined in accordance with this paragraph 7 at such time on such date. All shares of Wireless Group Common Stock delivered upon conversion of the New Tracking Stock will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges created by acts or omissions of the corporation and not subject to any preemptive rights. Upon the surrender of certificates representing the shares of New Tracking Stock to be ~~issued~~ converted, the shares to be so converted shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall no longer be deemed to be outstanding and all rights of a holder with respect to such shares surrendered for conversion shall immediately terminate except the ~~time of giving thereof)~~ right to receive the ~~registered holders of the Series B Preferred~~ Wireless Group Common Stock ~~at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which~~ and other amounts payable pursuant to this paragraph 7. (i) ~~the books~~ The corporation covenants, notwithstanding any prior redemption or exchange of ~~the Corporation shall close~~ all outstanding shares of Wireless Group Common Stock, (y) that for so long as any shares of New Tracking Stock are outstanding or ~~a record shall be taken for such stock dividend~~issuable upon conversion or exchange of other securities outstanding, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall it will at all times reserve and keep ~~available out~~ available, free from preemptive rights, such number of its authorized but unissued shares of Wireless Group Common ~~Stock, solely~~ Stock as shall be required for the purpose of effecting conversions of the New Tracking Stock and (z) that for so long as any shares of New Tracking Stock are outstanding or issuable upon conversion or exchange of other securities outstanding, the provisions of Article Third, Part C governing the terms of Wireless Group Common Stock shall remain fully operable and in effect. (ii) Prior to the delivery of any securities which the corporation shall be obligated to deliver upon conversion of the New Tracking Stock, the corporation shall comply with all applicable federal and state laws and regulations which require action to be taken by the corporation. (d) The corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Wireless Group Common Stock on conversion of the New Tracking Stock pursuant hereto; provided that the corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of shares of Wireless Group Common Stock in a name other than that of the holder of the New Tracking Stock to be converted and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the corporation the amount of any such tax or has established, to the satisfaction of the corporation, that such tax has been paid. (i) In case the corporation shall at any time after the date of initial issuance of the New Tracking Stock (A) declare a dividend or make a distribution on Wireless Group Common Stock payable in Wireless Group Common Stock, (B) subdivide or split the outstanding Wireless Group Common Stock, (C) combine or reclassify the outstanding Wireless Group Common Stock into a smaller number of shares, (D) issue any shares of its capital stock in a reclassification of Wireless Group Common Stock (including any such reclassification in connection with a consolidation or merger in which the corporation is the continuing corporation), or (E) consolidate with, or merge with or into, any other person, the Conversion Rate in effect at the time of the record date for such dividend or distribution or on the effective date of such subdivision, split, combination, consolidation, merger or reclassification shall be adjusted so that the conversion of the New Tracking Stock after such time shall entitle the holder to receive the aggregate number of shares of ~~Series B Preferred Stock~~Wireless Group Common Stock or other securities of the corporation (or other securities into which such shares of Wireless Group Common Stock have been converted, exchanged, combined, consolidated, merged or reclassified pursuant to clause 7(e)(i)(C), 7(e)(i)(D) or 7(e)(i)(E) above) which, if the New Tracking Stock had been converted immediately prior to such time, such ~~number~~ holder would have owned upon such conversion and been entitled to receive by virtue of ~~its shares of Common Stock as~~ such dividend, distribution, subdivision, split, combination, consolidation, merger or reclassification. Such adjustment shall ~~from time to time~~ be ~~sufficient to effect~~ made successively whenever an event listed above shall occur. (ii) In the ~~conversion of all outstanding shares of Series B Preferred Stock~~event that, ~~and if~~ at any time as a result of the provisions of this paragraph 7(e), a holder of New Tracking Stock upon subsequent conversion shall become entitled to receive any shares of capital stock of the corporation other than Wireless Group Common Stock, the number of ~~authorized but unissued~~ such other shares so receivable upon conversion of ~~Common~~ New Tracking Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall thereafter be subject to adjustment from time to time in a manner and on terms as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior nearly equivalent as practicable to the ~~happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to~~ provisions contained in this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effectiveAmendment. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Securities Purchase Agreement (At&t Corp)

Conversion. The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at a) At any time, a holder of one or more Class A Units shall have the right at his or her option to convert, subject to these provisions, any one or more of such Class A Units into Trust Units on a one for one basis. b) The conversion of one or more Class A Units shall be effected by the deposit of the Unit Certificate or Certificates representing the same at any time during usual business hours at any office of the ~~Corporation or any~~ transfer agent ~~for such Series~~of the Fund at which the Class A Units are transferable, ~~into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "~~together with a written conversion ~~ratio") and (y) (prior~~ form in form satisfactory to the ~~consummation~~ Corporation, on behalf of the ~~Recapitalization)~~ Fund, duly executed by the registered holder or his attorney duly authorized in writing, in which instrument such holder may elect to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all convert only part of the ~~outstanding shares of Series B Preferred Stock shall be~~ Class A Units represented by such Unit certificate or Ccertificates, in which event the Corporation, on ~~a pro rata basis amongst all holders of Series B Preferred Stock. After consummation~~ behalf of the ~~Recapitalization~~Fund, ~~the number "1,000" in this paragraph~~ shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver ~~at such office~~ or cause to be delivered to such holder, at the expense of the holder, a new Unit Certificate representing the Class A Units represented by such Unit Certificate or Ccertificates which have not been converted. c) As promptly as practicable after the deposit of any Class A Units for conversion, the Corporation, on behalf of the Fund, shall issue and shall deliver or cause to be delivered to or to the ~~nominee~~ written order of the holder of the Class A Units so surrendered, a Unit Certificate or ~~nominees~~ Certificates issued in the name of such ~~holder, a certificate or certificates for~~ holder representing the number of ~~shares of Common Stock~~ Trust Units to which such holder ~~shall be entitled as aforesaid~~is entitled. Such conversion shall be deemed to have been made ~~immediately prior to~~ at the close of business on the date such Class A Units shall have been properly deposited for conversion, so that the rights of the holder of such ~~Conversion Notice~~ Class A Units as the holder thereof shall cease at such time and the person or persons entitled to receive ~~the shares of Common Stock issuable~~ Trust Units upon such conversion shall be treated for all purposes as having become the ~~recordholder~~ holder or holders of ~~such shares of Common Stock as~~ record of such ~~date. The issuance~~ Trust Units at such time; provided, however, that no such deposit on any date when the Fund's register of ~~certificates or shares~~ transfers of ~~Common Stock upon conversion of shares of Series B Preferred Stock~~ Trust Units shall be ~~made without charge for any issue, stamp~~ properly closed shall be effective to constitute the person or ~~other similar tax in respect~~ persons entitled to receive Trust Units upon such conversion as the holder or holders of record of such ~~issuance. C. No fractional shares~~ Trust Units on such date, but such deposit shall be ~~issued upon conversion~~ effective to constitute the person or persons entitled to receive such Trust Units as the holder or holders of record thereof for all purposes when the Fund's register of transfers of Trust Units next open. For these purposes the date of deposit of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash Class A Units for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice conversion shall be deemed to be the ~~time of giving thereof) to~~ date when the ~~registered holders~~ Unit Certificate representing such Class A Units accompanied by a satisfactory conversion form is received by a transfer agent of the ~~Series B Preferred Stock at~~ Fund as provided for herein. SCHEDULE "B" To the ~~addresses of each as shown on~~ annexed amended and restated trust indenture (the ~~books of the Corporation maintained by the Transfer Agent thereof of the date on which (i~~"INDENTURE") the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date dated as of ~~which~~ July 27, 2006 and made between PENGROWTH CORPORATION and COMPUTERSHARE TRUST COMPANY OF CANADA. The Trust Units shall have the ~~holders of the Common Stock of record shall participate in said dividend, distribution or subscription~~ rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to ~~adjustment from time to time~~ the limitations, restrictions and conditions set out in the Indenture, as ~~follows: (i) In case~~ supplemented or amended by the ~~Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution~~rights, ~~on the outstanding shares of Common Stock in shares of Common Stock~~limitations, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, restrictions and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior conditions applicable to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (Trust Units as ~~defined~~ set out below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.:

Appears in 1 contract

Sources: Trust Indenture (Pengrowth Energy Trust)

Conversion. ~~The holders~~ (a) Commencing upon the earlier of (i) the ~~Series B Preferred Stock~~ closing of a Qualified Offering, and (ii) the Maturity Date, the Holder shall have ~~conversion rights as follows:~~the right (the “Conversion Right”), on the terms set forth in this Section 2.1, to convert the principal amount of this Note into Common Stock on the terms and conditions hereinafter set forth. ~~A. Each share~~ (b) In the event that the Holder elects to convert all or any portion of ~~Series B Preferred Stock~~ this Note into Common Stock, the Holder shall ~~be convertible at the direction of, and~~ give written notice of such election by ~~notice~~ delivering to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid Borrower an executed and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give completed notice of conversion ~~under paragraph A above~~(the “Notice of Conversion”), such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount and fees, if any, being converted. On each Conversion Date (as hereinafter defined) and in accordance with the Notice of Conversion, the ~~Corporation~~ Holder shall ~~notify~~ make the appropriate reduction to the Principal Amount as entered in its records and shall provide written notice thereof to the Borrower within two (2) Business Days after the Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the provisions hereof shall be deemed, for all ~~other record holders~~ purposes of ~~Series B Preferred Stock (a "~~this Note, to be the “Conversion ~~Notice")~~Date”. ~~Following receipt~~ Pursuant to the terms of ~~a Conversion Notice~~the Notice of Conversion, the ~~holders of Series B Preferred Stock shall surrender~~ Borrower will issue certificates representing the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such full or partial conversion ~~shall be treated for all purposes~~ of this Note and instructions to its transfer agent (together with such other documents as the ~~recordholder or holders~~ transfer agent may reasonably request) within two (2) Business Days of ~~such shares~~ the date of the delivery to the Borrower of the Notice of Conversion. The Borrower shall use its reasonable best efforts to cause its transfer agent to transmit the certificates representing the Common Stock ~~as of~~ issuable upon such ~~date. The issuance of certificates~~ full or ~~shares of Common Stock upon~~ partial conversion of ~~shares~~ this Note to any address or depositary directed by the Holder within five (5) Business Days after receipt by the Borrower of ~~Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect~~ the Notice of ~~such issuance~~Conversion. ~~C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the~~ (c) The number of shares of Common Stock to be issued upon any conversion of this Note (the “Conversion Shares”) shall be ~~rounded down~~ determined by dividing that portion of the principal to be converted by the ~~nearest whole share~~Conversion Price. As used herein, ~~and~~ “Conversion Price” shall mean an amount per share equal to (i) a 25% discount from the ~~holder of Series B Preferred Stock shall be paid~~ price per share (denominated in ~~cash for any fractional share. D. In case~~ U.S. dollars) at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of which the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be is sold in a ~~voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give~~ Qualified Offering (such price at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock ~~of record shall participate~~ is sold in ~~said dividend, distribution or subscription rights or shall be entitled~~ a Qualified Offering is referred to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the ~~case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after~~ “Offering Price”) if the ~~Recapitalization,~~ Qualified Offering occurs on or before the ~~Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion~~ six (6) month anniversary of the ~~shares of Series B Preferred Stock~~final Closing Date, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to ~~this clause~~ subsection (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. d); (ii) In a 40% discount from the ~~case the Corporation shall~~Offering Price, subject to adjustment pursuant to subsection (d), if a Qualified Offering occurs after the ~~Issue~~ six (6) month anniversary of the final Closing Date but on or before the twelve (12) 138358.00102/7094147v.1 month anniversary of the final Closing Date~~, issue shares of Common Stock at a price per share,~~ ; or ~~securities convertible into or exchangeable for shares of Common Stock~~ ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (Aiii) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum greater of (x) a 40% discount from the ~~number~~ VWAP of ~~shares of~~ the Common Stock ~~outstanding on such date~~ over the five (5) Trading Days prior to conversion, and (y) ~~the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued,~~ $0.10 per share if a Qualified Offering does not occur on or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the ~~record date fixed for the determination of stockholders entitled to receive such dividend or distribution by~~ twelve (212) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors month anniversary of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offfinal Closing Date. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Note (Ceelox Inc.)

Conversion. ~~The holders~~ Each then outstanding share of ~~the Series B Preferred~~ Class A Stock, Class C Stock and Class D Stock shall ~~have conversion rights as follows: A. Each~~ automatically be converted into one share of ~~Series B Preferred~~ Common Stock ~~shall be convertible at~~ upon the ~~direction~~ earlier to occur of~~, and by notice to~~ : (a) the ~~Corporation from,~~ approval of the holders of a majority of the voting power of the outstanding Class C and Class D Stock voting together as a single group (in which case such conversion shall be effective as of the date set forth in the stockholder approval) and (b) the occurrence of an Initial Public Offering (in which case such conversion shall be effective as of the IPO Date). The effective date of any such conversion is referred to herein as the "Conversion Date." Prior to or on the Conversion Date, each holder of shares of ~~Series B Preferred~~ Class A Stock, ~~at any time,~~ Class C Stock or Class D Stock shall surrender such holder's certificates evidencing such shares at the principal office of the Corporation or ~~any transfer agent for~~ at such ~~Series, into one thousand~~ other place as the Corporation shall designate to such holder in writing at least ten (~~1,000~~10) ~~fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (~~Business Days prior to the ~~consummation of~~ Conversion Date, and shall, within ten (10) Business Days after the ~~Recapitalization)~~ Conversion Date, be entitled to ~~limitations resulting~~ receive from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for evidencing the number of shares of Common Stock to into which such shares of Class A Stock, Class C Stock or Class D Stock are converted. On the Conversion Date, each holder ~~shall be entitled as aforesaid. Such conversion~~ of shares of Class A Stock, Class C Stock or Class D Stock shall be deemed to ~~have been made immediately prior to~~ be a holder of record of the ~~close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of~~ Common Stock issuable upon such ~~conversion shall be treated for all purposes as~~ conversion, notwithstanding that the ~~recordholder~~ certificates representing such Class A Stock, Class C Stock or ~~holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred~~ Class D Stock shall ~~be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and~~ not have been surrendered at the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock principal office of the Corporation or ~~consolidation or merger of~~ such other place as the Corporation ~~with or into another corporation~~may have designated, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases that notice from the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividendnot have been given or, ~~distribution or subscription rights or (ii) such reorganization~~if given, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not ~~invalidate~~ have been received by any ~~action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out~~ holder of ~~its authorized but unissued~~ shares of ~~Common~~ Class A Stock, ~~solely for the purpose of effecting the conversion of the shares of Series B Preferred~~ Class C Stock or Class D Stock, or that certificates evidencing such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not then be ~~sufficient~~ actually delivered to ~~effect~~ such holder. All certificates representing the ~~conversion of all then outstanding~~ converted shares of ~~Series B Preferred~~ Class A Stock, ~~then in addition to such other remedies as shall be availableto the holder of Series B Preferred~~ Class C Stock or Class D Stock, ~~the Corporation will take~~ including all certificates not so delivered by such ~~corporate action as may~~Class A Stock, ~~in the opinion of its counsel~~Class C Stock or Class D Stockholders, ~~be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as~~ shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telexbe, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to ~~be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties)~~be, ~~and the "Conversion Price" of any Convertible Securities is the total amount received or receivable~~ canceled by the Corporation as ~~consideration for~~ of the ~~issue~~ Conversion Date and shall thereafter no longer be of any force or ~~sale of such Convertible Securities (before deduction of underwriting discounts or commissions~~ effect and ~~expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to~~ the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not ~~have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original~~ thereafter issue ~~thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were~~ any such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Class A Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid Class C Stock or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Class D Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Support and Exchange Agreement (D&b Acquisition Sub Inc)

Conversion. (a) The ~~holders~~ Company intends to issue shares of its Series F Preferred Stock (the "SERIES F PREFERRED STOCK" prior to the maturity of the Notes (the "EQUITY CLOSING"). The Company will notify you in writing at least 30 days prior to the issuance and sale of such Series B F Preferred Stock ~~shall have conversion rights as follows: A. Each~~ of the price per share of Series B F Preferred Stock ~~shall be convertible at~~ (the ~~direction of,~~ "PURCHASE PRICE") and ~~by notice~~ the proposed closing date therefor. (b) You may elect to ~~the Corporation from, the holders of a majority~~ convert all or part of the ~~outstanding shares~~ unpaid principal balance and accrued interest under the Notes held by you into that number of ~~Series B Preferred Stock~~whole, ~~at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000)~~ fully paid and nonassessable shares of ~~Common~~ Series F Preferred Stock ~~subject (x)~~ that equals the sum of such unpaid principal balance or accrued interest to ~~adjustment from time to time as provided below (as so adjusted,~~ be converted divided by the ~~"conversion ratio") and (y) (prior to~~ Purchase Price. You may make such election by notifying the ~~consummation~~ Company in writing of the ~~Recapitalization)~~ amount of unpaid principal balance or accrued interest that you would like to ~~limitations resulting from~~ convert and the ~~available~~ number of shares of ~~Common~~ Series F Preferred Stock ~~which may~~ to be ~~reserved for~~ issued to you within 15 days after your receipt of notice of the proposed issuance ~~upon such conversion, provided ,that any conversion~~ of the Series F Preferred Stock pursuant to ~~this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock~~section 9.2(a). ~~After consummation of the Recapitalization~~In connection with such election or decision to make such election, upon your request, the ~~number "1,000" in this paragraph~~ Company shall deliver drafts of all agreements and documents to be ~~"1", subject~~ delivered by or to ~~adjustment as provided in paragraph VIII.G. B. If~~ the holders of ~~a majority of~~ the ~~outstanding shares of~~ Series B F Preferred Stock ~~give notice of conversion under paragraph A above,~~ in connection with the ~~Corporation shall notify all other record holders of Series B Preferred Stock~~ Equity Closing as they become available (a the "~~Conversion Notice~~EQUITY DOCUMENTS")~~. Following receipt of~~ . (c) Before you shall be entitled to convert any Notes into Series F Preferred Stock, you must surrender such Notes, duly endorsed for cancellation, to the Company and agree to become a ~~Conversion Notice,~~ party to and bound by the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issuedEquity Documents. The ~~Corporation~~ Company, shall, as soon as ~~practicable~~ practical thereafter, issue and deliver ~~at such office~~ to ~~such holder~~you, or ~~to the~~ your nominee or nominees ~~of such holder~~(acting on your behalf), a certificate ~~or certificates~~ for the number of full shares of ~~Common~~ Series F Preferred Stock to which ~~such holder~~ you shall be entitled ~~as aforesaid. Such~~ and, in the case of a partial conversion, a new Note representing the remaining unpaid principal balance thereunder. (d) The conversion shall be deemed to have been made ~~immediately prior to~~ as of the ~~close of business on the date of such Conversion Notice~~ Equity Closing Date, and the ~~person~~ Person or ~~persons~~ Persons entitled to receive the ~~shares of Common~~ Series F Preferred Stock issuable ~~upon~~ on such conversion shall be treated for all purposes as the recordholder or holders of such ~~shares~~ Series F Preferred Stock on such date and shall become a party to and be bound by all Equity Documents. (e) No fractional share shall be issued on conversion of ~~Common Stock as of such date. The issuance of certificates or shares of Common Stock~~ the Notes, but in lieu thereof, upon conversion of the remaining unpaid principal balance and accrued interest under the Notes held by you, the Company shall pay to you an amount in cash equal to such fraction multiplied by the Purchase Price. On conversion of any Note the Company shall pay any and all applicable issuance taxes that may be payable in respect of any issuance or delivery of shares of Series B F Preferred Stock on such conversion. The Company shall not, however, be ~~made without charge for~~ required to pay, and you shall pay, any ~~issue, stamp or other similar~~ tax that may be payable in respect of ~~such issuance. C. No fractional shares shall be issued upon conversion of~~ any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that transfer involved in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From issuance and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders delivery of shares of Series B F Preferred Stock in a name other than your name (if such transfer is permitted as provided herein), and no such issuance or delivery shall be ~~deemed given if sent by facsimile transmission, by telex, or if deposited in~~ made unless and until the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each Person requesting such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior issuance has paid to the ~~happening of such event or~~ Company the ~~record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case~~ amount of any such ~~dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution~~tax, or ~~(y) in~~ it is established to the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate satisfaction of the ~~Conversion Price of~~ Company that such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have tax has been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionpaid. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Note Purchase Agreement (Jetfax Inc)

Conversion. ~~The holders~~ (a) Provided a Deemed Conversion Event has not occurred, PET shall be entitled, at any time and from time to time, at its option, to exercise its Conversion Right with respect to all or any part of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of~~Special Warrants then outstanding, and thereby convert all or any portion of its Special Warrants into Common Shares, without payment of any additional consideration, by ~~notice~~ delivering to the Corporation ~~from~~a Conversion Notice specifying the number of Special Warrants in respect of which it is exercising the Conversion Right. Upon the receipt by the Corporation of a Conversion Notice and surrender of the certificate representing the Special Warrants in respect of which the Conversion Right is exercised, PET shall be entitled, effective as of the Conversion Date, to receive one or more certificates representing the Common Shares issued in respect of the Special Warrants so converted in accordance with Section 3.1(c) and a certificate representing any Special Warrants not converted, if applicable. For the purposes of this Agreement, no Special Warrant will be considered converted pursuant to the Conversion Right until the Conversion Date. (b) Subject to Subsection 3.1(i), notwithstanding Section 3.1(a) hereof, the ~~holders~~ Conversion Right shall be deemed to have been exercised, and all outstanding Special Warrants shall be deemed to have been converted, on the occurrence of a ~~majority~~ Deemed Conversion Event and PET shall be entitled, without payment of any additional consideration or undertaking any further action, to receive certificates representing the Common Shares issued in respect of the ~~outstanding shares of Series B Preferred Stock, at any time, at~~ Special Warrants so converted in accordance with Section 3.1(c). (c) As soon as possible after the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A aboveConversion Date, the Corporation shall ~~notify all other record holders of Series B Preferred Stock~~ (~~a "Conversion Notice"). Following receipt of a~~ or shall cause the Corporation's transfer agent to) deliver to the person or persons in whose name or names the Common Shares are to be registered as specified in the relevant Conversion Notice, ~~the holders~~ provided that such Person shall be PET or an Affiliate of ~~Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed~~PET, at the ~~office~~ address or addresses specified therein, or to such other person as PET may otherwise direct in writing, provided that such Person shall be PET or an Affiliate of PET, or if no such Conversion Notice has been delivered, to PET or to such other person as PET may otherwise direct in writing, provided that such Person shall be PET or an Affiliate of PET, a certificate representing the Common Shares issued in respect of the Special Warrants so converted and a certificate representing any Special Warrants not converted, if applicable. (d) If any of the Common Shares issuable as contemplated in Section 3.1(b) or 3.1(c), as applicable, are to be issued to a person or persons other than PET, PET shall comply with such reasonable requirements as the Corporation (or the Corporation's transfer agent) may prescribe, and pay to the Corporation (or the Corporation's transfer agent on behalf of the Corporation) all applicable transfer or similar taxes or fees, and the Corporation shall not be required to cause the issuance or delivery of certificates representing such Common Shares unless PET has paid the amount of such tax or fee or has established to the satisfaction of the Corporation that such fee or ~~of any transfer agent for~~ tax has been paid or that no such ~~Series,~~ fee or tax is payable and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office that all Applicable Securities Laws with respect to such ~~holder~~transfer have been complied with. (e) Upon the exercise (including deemed exercise) of the Conversion Right in accordance with this Section 3.1, notwithstanding that certificates representing the Common Shares may not have been issued or delivered (whether pursuant to Section 3.1(d) or otherwise), the ~~nominee or nominees of such holder, a certificate or certificates for~~ Common Shares issuable on the ~~number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such~~ conversion shall be deemed to have been ~~made immediately prior to the close of business on the date of such Conversion Notice~~ issued, and the person or persons ~~entitled~~ to ~~receive the shares of~~ whom such Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock Shares are to be issued shall be ~~rounded down~~ deemed to ~~the nearest whole share, and~~ have become the holder ~~of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time~~ or ~~from time to time the Corporation shall pay any dividend or make any other distribution to the~~ holders of ~~its~~ record of such Common ~~Stock or other class of securities~~Shares, ~~or shall offer~~ on the Conversion Date or, if the transfer register for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown Shares is closed on the ~~books of~~ Conversion Date, on the ~~Corporation maintained by the Transfer Agent thereof of the~~ first date on which the transfer register is reopened. (if) Effective after the ~~books~~ exercise or deemed exercise of the ~~Corporation shall close or a record shall be taken for such stock dividend~~Conversion Right and the issuance of Common Shares relating thereto as contemplated in Section 3.1(e), ~~distribution or subscription rights or (ii~~and delivery of the certificate(s) ~~such reorganization~~representing the Common Shares so issued as provided in Section 3.1(c), ~~reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as~~ the ~~case may be, provided that~~ Special Warrants in ~~the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as~~ respect of which the ~~holders~~ Conversion Right has been so exercised shall be void and of no further effect. (g) The certificates representing Common Shares issued upon exercise or deemed exercise of the ~~Common Stock~~ Conversion Right will, unless issued at least four months after the Closing Date, bear the following legend: "UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE · {insert date that is four months and one day from the Closing Date}" (h) Following each exercise or deemed exercise of ~~record shall participate~~ the Conversion Right in ~~said dividend~~accordance with Section 3.1(a) or 3.1(b), ~~distribution or subscription rights or~~ the Corporation shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion receive a pro rata portion of the ~~shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time~~ Trust Fund corresponding to ~~time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time~~ the number of ~~authorized but unissued shares~~ Special Warrants in respect of ~~Common Stock shall not be sufficient~~ which the Conversion Right is exercised or deemed to ~~effect the conversion of all then outstanding shares of Series B Preferred Stock~~have been exercised, ~~then in addition to such other remedies as~~ which shall be ~~availableto the holder of Series B Preferred Stock,~~ paid to the Corporation ~~will take such corporate action as may,~~ in ~~the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes~~accordance with Trust Account Agreement. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a ~~distribution~~ Deemed Conversion Event by reason of ~~shares of capital stock of a Subsidiary~~ (b), (c), (d), or (e) of the ~~Corporation (a "Spin-Off") made~~ definition of Deemed Conversion Event, Profound shall have the option, at its sole discretion, to ~~holders of shares of Common Stock, the numerator of such fraction shall be the sum~~ redeem all or any portion of the ~~Current Market Price per share~~ Special Warrants then outstanding instead of issuing Common ~~Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price~~ Shares on conversion of the ~~number of shares~~ Special Warrants in which case the Special Warrants to be redeemed will be redeemed in accordance with Section 3.3 (~~or the fraction of~~ disregarding Subsection 3.3(c)) as if PET had delivered a ~~share) of capital stock of the Subsidiary which is distributed in~~ Redemption Notice with respect to such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffSpecial Warrants. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Special Warrant Agreement (Paramount Energy Trust)

Conversion. The holders of the Series B C Preferred Stock shall have conversion rights as follows: A. Each share of Series B C Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, (i) the holder thereof or (ii) the holders of a majority of the outstanding shares of Series B C Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, ~~provided ,~~provided, that any conversion pursuant to ~~this paragraph A~~ clause (ii) above of less than all of the outstanding shares of Series B C Preferred Stock shall be on a pro rata basis amongst all holders of Series B C Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If a holder of Series C Preferred Stock gives notice (an "Optional Conversion Notice") of conversion under paragraph A above, such holder shall surrender with such Optional Conversion Notice the duly endorsed certificate or certificates for the Series C Preferred Stock being converted, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. If the holders of a majority of the outstanding shares of Series B C Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B C Preferred Stock (a "Mandatory Conversion Notice"). Following receipt of a Mandatory Conversion Notice, the holders of Series B C Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable ~~thereafter~~after the surrender of a Series C Preferred Stock certificate or certificates pursuant to an Optional Conversion Notice or Mandatory Conversion Notice, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Optional Conversion Notice or Mandatory Conversion Notice, as applicable, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B C Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B C Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B C Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B C Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B C Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B C Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B C Preferred Stock, then in addition to such other remedies as shall be ~~availableto~~ available to the holder of Series B C Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B C Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B C Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B C Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B C Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon such expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise ~~or conversion~~ of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B C Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record ~~date,~~ date less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B C Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Preferred Stock Purchase Agreement (Aames Financial Corp/De)

Conversion. The ~~holders~~ Lender shall have the right, at any time after the Company sells shares of ~~the~~ its Series B Convertible Preferred Stock ~~shall have conversion rights as follows: A. Each share of~~ (the “Series B ~~Preferred Stock shall be convertible at the direction of, and by notice~~ Stock”) to ~~the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock,~~ convert at any time, ~~at the office~~ all or a portion of the ~~Corporation or any transfer agent for such Series,~~ outstanding Principal Amount and accrued and unpaid interest into ~~one thousand (1,000)~~ fully paid and ~~nonassessable~~ non-assessable shares of ~~Common~~ the Company’s Series B Convertible Preferred Stock ~~subject~~ (xthe “Series B Stock”) ~~to adjustment from time to time as provided below~~ at a conversion price (~~as so adjusted,~~ the ~~"conversion ratio"~~“Conversion Price”) ~~and (y) (prior~~ equal to the ~~consummation of~~ price paid by the ~~Recapitalization) to limitations resulting from~~ investors in the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares Company’s offering of Series B ~~Preferred~~ Stock ~~shall~~ (expected to be on $7.50 per share). Promptly after the surrender of this Note, accompanied by a ~~pro rata basis amongst all holders~~ Notice of ~~Series B Preferred Stock. After consummation~~ Conversion of Convertible Note in the ~~Recapitalization~~form attached hereto as Exhibit 1, properly completed and duly executed by the Lender (a “Conversion Notice”), the ~~number "1,000" in this paragraph~~ Company shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver ~~at such office~~ to ~~such holder,~~ or to upon the ~~nominee or nominees~~ order of ~~such holder, a certificate or certificates for~~ the Lender that number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B ~~Preferred~~ Stock for that portion of this Note to be converted as shall be ~~made without charge for any issue, stamp~~ determined in accordance herewith. No fraction of a share or ~~other similar tax in respect~~ scrip representing a fraction of ~~such issuance. C. No fractional shares shall~~ a share will be issued ~~upon conversion of any shares of Series B Preferred Stock and~~ on conversion, but the number of shares ~~of Common Stock to be issued~~ issuable shall be rounded ~~down~~ to the nearest whole share~~, and the holder~~ . The date on which Notice of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice Conversion is given (the ~~time of mailing of such notice~~ “Conversion Date”) shall be deemed to be the ~~time~~ date on which the Lender delivers the Notice of ~~giving thereof)~~ Conversion duly executed to the ~~registered holders~~ Company. Electronic delivery of the Notice of Conversion shall be accepted by the Company at the e-mail address: “▇▇▇▇▇▇▇▇@▇▇▇▇-▇▇▇▇▇▇.▇▇▇”. Certificates representing Series B ~~Preferred~~ Stock at issuable upon conversion will be delivered to the ~~addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof~~ Lender within five (5) Days of the date ~~on which (i)~~ the ~~books~~ Notice of Conversion is delivered to the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaidCompany. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number Delivery of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for upon conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior made to the ~~happening of such event or~~ address specified by the ~~record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x)~~ Lender in the ~~case~~ Notice of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effectiveConversion. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Note (Cell Source, Inc.)

Conversion. ~~The holders~~ A holder of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B~~ Preferred Stock shall be ~~convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~entitled, at any ~~time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from~~ time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on any date fixed for the redemption of such shares, to cause any or all such shares to be converted into ten shares of the Company's Common Stock for each share of Preferred Stock ( the "Conversion Price"), subject to the anti-dilution provisions provided herein. The issuance by the Company of shares of Common Stock upon any conversion of shares of the Preferred Stock made at the option of the holder thereof, shall be effective as of the earlier of (i) the delivery to such holder or such holders' designee of certificates representing the shares of Common Stock issued upon Conversion thereof or (ii) the commencement of business on the second business day after the surrender of the certificate or certificates for the shares of Preferred Stock to be converted, duly assigned or endorsed for transfer to the Company (or accompanied by duly executed stock powers relating thereto) as provided hereby. On or after the effective date of ~~such Conversion Notice~~ any Conversion, the converted shares of the Preferred Stock shall no longer be deemed to be outstanding and all rights whatsoever with respect thereto shall terminate, and the person or persons entitled to receive the ~~shares of~~ Common Stock issuable upon such ~~conversion~~ Conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such shares of Common ~~Stock as of such date~~Stock. ~~The issuance of certificates or~~ All shares of ~~Common~~ the Preferred Stock upon ~~conversion of shares of Series B Preferred Stock~~ Conversion shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down restored to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number status of authorized but unissued shares of ~~Common Stock shall not be sufficient~~ preferred stock without designation as to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaidClass, and ~~addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G.~~ may be issued thereafter. The ~~conversion ratio~~ Conversion Price shall be subject to adjustment ~~from time to time as follows:~~ in the event of (i) ~~In case~~ any subdivision or combination of the ~~Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the~~ Company's outstanding ~~shares of Common Stock in shares of~~ Common Stock, (Bii) ~~subdivide~~ any payment by the ~~outstanding shares~~ Company of a stock dividend to the holders of the Company's Common Stock holders or holders of any other of stock convertible into ~~a larger number of shares of~~ Common Stock, ~~(C) combine the outstanding shares of Common Stock into a smaller number of shares~~ or (Diii) any future issue ~~by reclassification~~ of ~~the shares of Common Stock any shares of capital~~ stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into ~~or exchangeable for shares of~~ the Common Stock ~~("Convertible Securities") having~~ of the Company at a ~~"Conversion Price" (as defined below)~~ price less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Offering Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Subscription Agreement (Avitar Inc /De/)

Conversion. (a) The ~~holders~~ Holder of ~~the Series B Preferred Stock~~ this Note shall have ~~conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible~~ the right, at ~~the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~its option, at any ~~time, at~~ time the ~~office~~ Fair Market Value of the ~~Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of~~ Common Stock ~~subject~~ of Electropure shall equal or exceed One Dollar (~~x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio"~~$1.00) and up until 5:00 P.M. Los Angeles time on the fifth (y5th) day immediately before the Maturity Date (except that, with respect to any portion of this Note which shall be called for prepayment, such right shall as to such portion terminate at 5:00 P.M. Los Angeles time on the fifth (5th) day immediately prior to the ~~consummation~~ Prepayment Date (as defined in Section 2 hereof)), to convert all or any portion of ~~the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion~~this Note, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1"including interest accrued thereon, subject to ~~adjustment as provided in paragraph VIII.G. B. If~~ the ~~holders~~ terms and provisions of ~~a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph~~ this Section 1, into Electropure Class A ~~above, the Corporation shall notify all other record holders of Series B Preferred~~ Common Stock (a the "Conversion ~~Notice~~Shares") at and having a value equal to One Dollar ($1.00) per share (the "Conversion Price"). ~~Following receipt~~ The Conversion Shares shall have the rights, preferences and privileges set forth in Exhibit "A" to the Settlement Agreement under DESCRIPTION OF CAPITAL STOCK - "Common Stock". (b) As promptly as practicable after the surrender, as herein provided, of ~~a Conversion Notice~~this Note for conversion, Electropure shall deliver or cause to be delivered, to or upon the ~~holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office~~ written order of the ~~Corporation or~~ Holder of ~~any transfer agent for such Series~~this Note so surrendered, ~~and shall state therein the name or names in which the certificate or~~ certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for representing the number of full shares into which this Note or any portion thereof may be converted in accordance with the provisions of ~~Common Stock to which such holder shall be entitled as aforesaid~~this Section 1, together with any check in payment for fractional shares. Such conversion shall be deemed to have been made ~~immediately prior to~~ at the close of business on the date that this Note shall have been received by the Company for conversion, with a written Notice of ~~such~~ Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, thenduly executed, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken satisfactory form for ~~such stock dividend~~conversion, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the ~~holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities~~ rights of the ~~Corporation which such holder would have owned or have been entitled~~ Holder of this Note as a Noteholder, to ~~receive after~~ the ~~happening~~ extent of ~~any~~ that portion of the ~~events described above~~Note so converted, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.cease

Appears in 1 contract

Sources: Settlement Agreement (Electropure Inc)

Conversion. (a) The ~~holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible~~ Holder is entitled, at ~~the direction of~~its option, ~~and by notice~~ to ~~the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock,~~ convert at any time, ~~at the office~~ until payment in full of this Debenture, all or any part of the ~~Corporation or any transfer agent for such Series~~then unpaid principal amount of the Debenture, plus accrued and unpaid interest, into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject~~ at the price per share equal to seventy five cents (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1"$0.75), subject to adjustment as ~~provided~~ hereinbelow set forth (the “Conversion Price”). The Obligor shall deliver Common Stock certificates to the Holder within 5 (five) days subsequent to any conversion. (b) The Holder shall effect conversions by delivering to the Obligor a completed notice in ~~paragraph VIII.G.~~the form attached hereto as Exhibit A (a “Conversion Notice”). The date on which a Conversion Notice is delivered is the “Conversion Date.” Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not required to physically surrender this Debenture to the Obligor in order to effect conversions. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture plus all accrued and unpaid interest thereon in an amount equal to the applicable conversion. The Holder and the Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Obligor shall be controlling and determinative in the absence of manifest error. B. (c) If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsedObligor, at ~~the office of the Corporation~~ any time while this Debenture is outstanding, shall (i) pay a stock dividend or ~~of any transfer agent for such Series, and shall state therein the name~~ otherwise make a distribution or ~~names in which the certificate or certificates for~~ distributions on shares of Common Stock ~~are to be issued. The Corporation shall~~or any other equity or equity equivalent securities payable in shares of Common Stock, ~~as soon as practicable thereafter~~(ii) subdivide outstanding shares of Common Stock into a larger number of shares, ~~issue and deliver at such office to such holder~~(iii) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or to (iv) issue by reclassification of shares of the ~~nominee or nominees~~ Common Stock any shares of ~~such holder~~capital stock of the Obligor, then the Conversion Price shall be multiplied by a ~~certificate or certificates for~~ fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. (d) In case of any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, the Holder shall have the right thereafter to, at its option, (A) convert the then outstanding principal amount, together with all accrued but unpaid interest and any other amounts then owing hereunder in respect of this Debenture into the shares of stock and other securities, cash and property receivable upon or deemed to be held by holders of the Common Stock following such ~~holder~~ reclassification or share exchange, and the Holder of this Debenture shall be entitled upon such event to receive such amount of securities, cash or property as ~~aforesaid. Such conversion shall be deemed to~~ the shares of the Common Stock of the Obligor into which the then outstanding principal amount, together with all accrued but unpaid interest and any other amounts then owing hereunder in respect of this Debenture could have been ~~made~~ converted immediately prior to such reclassification or share exchange would have been entitled, or (B) require the ~~close~~ Obligor to prepay the outstanding principal amount of ~~business on the date~~ this Debenture, plus all interest and other amounts due and payable thereon. The entire prepayment price shall be paid in cash. This provision shall similarly apply to successive reclassifications or share exchanges. (e) The Obligor shall maintain a share reserve of ~~such Conversion Notice and the person or persons entitled to receive~~ not less than one percent (100%) of the shares of Common Stock issuable upon ~~such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon~~ conversion of ~~shares~~ this Debenture; and within three (3) Business Days following the receipt by the Obligor of ~~Series B Preferred Stock~~ a Holder's notice that such minimum number of Underlying Shares is not so reserved, the Obligor shall ~~be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the~~ promptly reserve a sufficient number of shares of Common Stock to ~~be issued~~ comply with such requirement. (f) All calculations under this Section 3 shall be rounded ~~down~~ up to the nearest ~~whole share, and the holder~~ $0.001 of ~~Series B Preferred Stock shall be paid in cash for any fractional~~ a share. ~~D. In case at any time~~ (g) Whenever the Conversion Price is adjusted pursuant to this Section 2 , the Obligor shall promptly mail to the Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. (h) If (A) the Obligor shall declare a dividend (or ~~from time to time the Corporation shall pay any dividend or make~~ any other ~~distribution~~ distribution) on the Common Stock; (B) the Obligor shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Obligor shall authorize the granting to ~~the~~ all holders of ~~its~~ the Common Stock rights or ~~other class of securities,~~ warrants to subscribe for or ~~shall offer for subscription pro rata to the holders of its Common Stock or other class of securities~~ purchase any ~~additional~~ shares of capital stock of any class or of any ~~other right, or there~~ rights; (D) the approval of any stockholders of the Obligor shall be required in connection with any ~~capital reorganization or~~ reclassification of the Common ~~Stock of the Corporation or~~ Stock, any consolidation or merger of to which the ~~Corporation with or into another corporation~~Obligor is a party, or any sale or ~~conveyance to another corporation~~ transfer of all or substantially all of the ~~property~~ assets of the ~~Corporation as an entirety~~ Obligor, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or ~~substantially as an entirety,~~ property; or ~~there~~ (E) the Obligor shall ~~be a~~ authorize the voluntary or involuntary dissolution, liquidation or winding up of the ~~Corporation,~~ affairs of the Obligor; then, in ~~any one or more of said cases~~ each case, the ~~Corporation~~ Obligor shall ~~give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed~~ cause to be filed at each office or agency maintained for the ~~time~~ purpose of ~~giving thereof)~~ conversion of this Debenture, and shall cause to be mailed to the ~~registered holders of~~ Holder at its last address as it shall appear upon the ~~Series B Preferred Stock at the addresses of each as shown on the~~ stock books of the ~~Corporation maintained by~~ Obligor, at least twenty (20) calendar days prior to the ~~Transfer Agent thereof of~~ applicable record or effective date hereinafter specified, a notice stating (x) the date on which ~~(i) the books of the Corporation shall close or~~ a record ~~shall~~ is to be taken for the purpose of such ~~stock~~ dividend, ~~distribution or subscription~~ distribution, redemption, rights or ~~(ii) such reorganization~~warrants, ~~reclassification~~or if a record is not to be taken, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record ~~shall participate in said~~ to be entitled to such dividend, ~~distribution or subscription~~ distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for ~~securities~~ securities, cash or other property deliverable upon such ~~reorganization,~~ reclassification, consolidation, merger, ~~sale~~ sale, transfer or ~~conveyance~~ share exchange, provided, that the failure to mail such notice or ~~participate~~ any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such ~~dissolution, liquidation or winding up, as~~ notice. The Holder is entitled to convert this Debenture during the ~~case may be. Failure to give~~ 20-day calendar period commencing the date of such notice ~~shall not invalidate any action so taken~~to the effective date of the event triggering such notice. ~~E. From and after the Recapitalization, the Corporation shall~~ (i) The Obligor covenants that it will at all times reserve and keep available out of its authorized ~~but~~ and unissued shares of Common ~~Stock,~~ Stock solely for the purpose of ~~effecting~~ issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder, not less than such number of shares of the Common Stock as shall (subject to any additional requirements of the Obligor as to reservation of such shares set forth in this Debenture) be issuable (taking into account the adjustments in this Section 2) upon the conversion of the ~~shares~~ outstanding principal amount of ~~Series B Preferred Stock, such number~~ this Debenture and payment of ~~its~~ interest hereunder. The Obligor covenants that all shares of Common Stock as that shall ~~from time to time~~ be ~~sufficient to effect~~ so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable . (j) Upon a conversion hereunder the ~~conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock~~ Obligor shall not be ~~sufficient~~ required to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders issue stock certificates representing fractions of shares of ~~Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in~~ the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, ~~(B) subdivide the outstanding shares of Common Stock into~~ but may if otherwise permitted, make a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and cash payment in ~~each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder~~ respect of any ~~shares~~ final fraction of ~~Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive~~ a share based on the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening fair value of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Obligor’s Board of ~~Directors~~ Directors. If the Obligor elects not, or is unable, to make such a cash payment, the Holder shall be entitled to receive, in lieu of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the final fraction of a share~~) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of~~ , one whole share of Common ~~Stock~~ Stock. (k) The issuance of certificates for ~~the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share~~ shares of the Common Stock on conversion of this Debenture shall be made without charge to the Holder thereof for any documentary stamp or similar taxes that may be payable in respect of the ~~period~~ issue or delivery of ~~20 Trading~~ such certificate, provided that the Obligor shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of such Debenture so converted and the Obligor shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Obligor the amount of such tax or shall have established to the satisfaction of the Obligor that such tax has been paid. (l) Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered upon receipt. The addresses for such communications shall be: If to the Obligor, to: Globaltel IP, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer If to the Holder: ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 95 The ▇▇▇▇ ▇▇▇▇ Head, NY 11545 or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business Days ~~proceeding~~ prior to the effectiveness of such ~~35th Trading Day~~change. ~~An adjustment made pursuant to this clause~~ Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be ~~made upon the opening~~ rebuttable evidence of ~~business on the next Business Day following the date on which any such dividend~~ personal service, receipt by facsimile or ~~distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend~~ receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or ~~distribution; provided~~(iii) above, ~~however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off~~respectively. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Debenture (GlobalTel IP, Inc.)

Conversion. ~~The holders~~ (a) Subject to the provisions of ~~the~~ this paragraph 5, each holder of shares of Series B C-1 Preferred Stock shall have ~~conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible~~ the right, at ~~the direction of~~any time and from time to time, ~~and by notice~~ at such holder's option, to ~~the Corporation from, the holders of a majority of the~~ convert its outstanding shares of Series B C-1 Preferred Stock, ~~at any time, at the office of the Corporation~~ in whole or ~~any transfer agent for such Series~~in part, into ~~one thousand (1,000)~~ fully paid and ~~nonassessable~~ non-assessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available Stock. The number of shares of Common Stock ~~which may~~ deliverable upon conversion of each share of a particular Subseries of Series C-1 Preferred Stock shall be ~~reserved~~ equal to (i) the Accrued Value of such share on the date of conversion (treating such date as a Dividend Accrual Date for ~~issuance upon~~ purposes of calculating the Accrued Value on such ~~conversion~~date), ~~provided ,that~~ divided by (ii) the Conversion Price on such date. No notice delivered by the Corporation pursuant to paragraph 6 or 7 will limit in any ~~conversion~~ way any holder's rights to convert pursuant to this paragraph ~~A of less than all~~ 5(a). In order to exercise the conversion privilege set forth in paragraph 5(a), the holder of the ~~outstanding~~ shares of Series B C-1 Preferred Stock ~~shall~~ to be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock converted shall surrender the certificate ~~or certificates therefor duly endorsed,~~ representing such shares at the office of the ~~Corporation or~~ Corporation, with a written notice of ~~any transfer agent for such Series~~election to convert completed and signed, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for specifying the number of shares ~~of Common Stock~~ to ~~which such holder shall~~ be ~~entitled as aforesaid~~converted. ~~Such~~ Each conversion pursuant to paragraph 5(a) shall be deemed to have been ~~made~~ effected immediately prior to the close of business on the date on which the certificates for shares of Series C-1 Preferred Stock shall have been surrendered and such ~~Conversion Notice~~ notice received by the Corporation as aforesaid, and the person in whose name or ~~persons entitled~~ names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder of record of the shares of Common Stock represented thereby at such time on such date. Effective upon such conversion, the shares of Series C-1 Preferred Stock so converted shall no longer be deemed to be outstanding, and all rights of a holder with respect to such shares surrendered for conversion shall immediately terminate except the right to receive the Common Stock and other amounts payable pursuant to this paragraph 5. (i) Unless the shares issuable on conversion pursuant to this paragraph 4 are to be issued in the same name as the name in which such shares of Series C-1 Preferred Stock are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the holder or the holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax. (ii) Stock with a written notice of election to convert as aforesaid, the Corporation shall issue and shall deliver to such holder, or on the holder's written order (upon compliance with subparagraph (b)(i) hereof and federal and state securities laws applicable thereto which require the holder to take any action) to the holder's transferee, a certificate or certificates for the whole number of shares of Common Stock issuable upon ~~such~~ the conversion ~~shall be treated for all purposes as the recordholder or holders~~ of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation accordance with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion5. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of All shares of Common Stock ~~which are referred to in clause (i)~~ delivered upon conversion of ~~this paragraph G, then, and in each such case,~~ the ~~conversion ratio shall be adjusted so that the holder of each share of~~ Series B C-1 Preferred Stock ~~shall~~ will upon delivery be ~~entitled to receive~~duly and validly issued and fully paid and non-assessable, ~~upon the conversion thereof, the number~~ free of ~~shares of Common Stock determined by multiplying~~ all liens and charges (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith other than caused by the ~~Board of Directors of the Corporation, a certified resolution with respect~~ holder) and not subject to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offpreemptive rights. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Securities Purchase Agreement (Labone Inc/)

Conversion. (a) The ~~holders~~ Note will be converted into shares of the Issuer’s Series B A Mandatorily Redeemable Preferred Stock ~~shall have conversion rights as follows: A. Each share~~ in accordance with the terms of ~~Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority~~ Section 9.10 of the ~~outstanding shares~~ Purchase Agreement upon satisfaction (or waiver by the Purchasers, if such condition is capable of ~~Series B Preferred Stock~~being waived by the Purchasers) of the conditions set forth therein. (b) The Holder has the right, at its option, at any ~~time, at the office of the Corporation~~ time or ~~any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment~~ from time to ~~time as provided below (as so adjusted~~time, subject to the ~~"conversion ratio")~~ other provisions herein and ~~(y) (~~in the Purchase Agreement, prior to the ~~consummation~~ close of business on the ~~Recapitalization)~~ Maturity Date, to ~~limitations resulting from the available~~ convert all or any portion of this Note into a number of shares of Common Stock ~~which may be reserved for issuance~~ equal to the principal amount, plus any accrued but uncapitalized interest, being converted divided by the Conversion Price (as defined below), upon ~~such conversion, provided ,that any conversion pursuant to this paragraph A~~ delivery of ~~less than all~~ a Notice of ~~the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization~~Conversion, the ~~number "1,000"~~ form of which is attached hereto, and surrender of this Note, duly endorsed or assigned to the Company or in ~~this paragraph shall be "1", subject~~ blank to ~~adjustment as provided in paragraph VIII.G. B. If~~ the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, Issuer at the office or agency of the ~~Corporation or of any transfer agent~~ Issuer maintained for ~~such Series, and shall state therein the name or names in which the certificate or certificates for~~ that purpose. No fractional shares of Common Stock ~~are~~ shall be issued upon any conversion, but cash shall be paid to the Holder in respect of any fraction of such share which would otherwise be ~~issued~~issuable upon the conversion. ~~The Corporation~~ Upon receipt of a Notice of Conversion, the Issuer (itself, or through its transfer agent) shall, as soon as practicable thereafter, but in any event within three Business Days after receipt of such notice, issue and deliver ~~at such office~~ to ~~such holder~~the Holder of this Note, or ~~to the nominee or nominees of such holder~~its nominee, ~~a certificate or certificates for the~~ that number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable ~~upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock~~ upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification portion of the ~~Common Stock~~ Note specified in the Notice of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained Conversion by ~~the Transfer Agent thereof of the date on which~~ either (i) crediting the ~~books~~ account of the ~~Corporation shall close~~ Holder or ~~a record shall be taken for such stock dividend, distribution or subscription rights~~ its nominee at The Depository Trust Company or (ii) ~~such reorganization, reclassification, consolidation, merger, sale~~ delivering a stock certificate or ~~conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that~~ certificates to and in the ~~case~~ name of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her Holder or its ~~address appearing on the books of the Corporation. G.~~ nominee. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification issuance of the shares of Common Stock ~~any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier,~~ shall be ~~adjusted so~~ made by the Issuer, at its sole expense, provided that the ~~holder~~ Issuer shall not be required to pay any transfer tax in respect of any delivery of any shares in any name other than that of ~~Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive~~ the ~~number~~ Holder of ~~shares~~ this Note. Shares of Common Stock ~~or other securities~~ issued upon conversion of this Note shall bear all restrictive legends required by law and as contemplated by the Purchase Agreement. In the event less than the full principal amount of the ~~Corporation which~~ Note is converted, the Holder shall promptly return this Note to the Issuer and the Issuer, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Note of like tenor, in the name of the Holder hereof or as such ~~holder would have owned or have been entitled to receive after the happening~~ Holder (upon payment by such Holder of any applicable transfer taxes) may request, for the balance of the ~~events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior~~ principal amount then outstanding. The Issuer shall not be obligated to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at upon a ~~price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (~~conversion unless either this Note is delivered to the Company as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issuedprovided above, or the ~~number of shares of Common Stock which~~ Holder notifies the ~~aggregate of~~ Issuer that this Note has been lost, stolen or destroyed and provides sufficient indemnity as may be reasonably required by the ~~Conversion Price of~~ Issuer to save the Issuer harmless for any loss, liability, cost or expense associated with any such ~~Convertible Securities so issued~~loss, ~~would purchase at such Current Market price on such date~~stolen or destroyed certificate. ~~An adjustment made~~ Upon conversion pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (iiSection 2(b), the ~~aggregate consideration receivable by~~ portion of the ~~Corporation in connection with the issuance of any securities~~ Note that is converted shall be deemed to be ~~the sum of the aggregate offering price to the public~~ paid in full (~~before deduction of underwriting discounts~~ rather than cancelled, extinguished or ~~commissions and expenses payable to third parties~~forfeited), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Subordinated Note (API Technologies Corp.)

Conversion. ~~The holders~~ 6.1 EACH holder of outstanding Notes shall (upon and subject to the provisions set out below) be entitled by serving on the Company written notice at any time after the Season Date to require the whole or any part of his holding of outstanding Notes (being an integral multiple of US $1 nominal) to be converted into new common shares in the capital of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible~~ Company at the ~~direction of~~rate, ~~and by notice~~ subject to ~~the Corporation from~~adjustment under paragraph 6.2 below, ~~the holders~~ of ~~a majority of the outstanding~~ 875 new common shares (presently common shares of ~~Series B Preferred Stock, at any time, at the office~~ US $1 each ) for every US $10,000 nominal of ~~the Corporation or any transfer agent for~~ Notes being converted (such ~~Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment~~ rate as so adjusted from time to time ~~as provided below (as so adjusted,~~ being hereinafter called “the "conversion ~~ratio"~~rate”) and ~~(y) (prior to the consummation~~ so in proportion for any greater or lesser amount of Notes converted. Within 14 days of the ~~Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon~~ Company receiving such ~~conversion, provided ,that any conversion pursuant to this paragraph A of less than all~~ notice of the ~~outstanding shares of Series B Preferred Stock~~ relevant Notes shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of~~ converted into new common shares in the ~~Recapitalization,~~ Company at the ~~number "1,000" in this paragraph~~ conversion rate and such shares shall be ~~"1", subject~~ issued to ~~adjustment as provided in paragraph VIII.G. B. If~~ the holders of ~~a majority~~ the relevant Notes fully paid in full satisfaction of ~~the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify~~ all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, liabilities to and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees right of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of the Notes converted and the Notes shall on such ~~issuance. C.~~ conversion be cancelled. The new common shares so issued may contain such legends and be subject to such certification requirements or restrictions on transfer as may be, in the Company’s opinion, necessary or advisable to comply with any applicable law or regulations. No ~~fractional~~ new common shares ~~shall~~ may be issued upon conversion of the Notes prior to the Season Date. 6.2.1 Upon any issue of fully paid common shares in the capital of ~~Series B Preferred Stock~~ the Company pursuant to a capitalization of profits or reserves (including, without limitation, share premium account and capital redemption reserve) to any common shareholders on the register on a record date being a date on which any Notes remain capable of being converted, and upon any consolidation or subdivision at any time of the common share capital of the Company for the time being, the number of common shares in the capital of ~~Common Stock~~ the Company to be issued in respect of Notes converted on any date following such record date or on any date following such subdivision or consolidation shall be increased or decreased in due proportion. No adjustment shall be made in the conversion rate by reason only of a holder of common shares in the capital of the Company wholly or partially foregoing his entitlement to a cash dividend and in lieu thereof the Company making an issue to him of fully paid common shares by way of capitalization of an amount standing to the credit of the profit and loss account or revenue reserves equal to the amount of the cash dividend foregone. 6.2.1 If, whilst any Notes remain capable of being converted, the Company shall make any offer of common shares (“New Shares”) or of rights to common shareholders of the Company on the register on a record date being a date on which any Notes remain capable of being converted the Company shall make, or use its best endeavors to procure that there is made, a like offer at the same time to each Noteholder as if his conversion rights had been exercisable and exercised in full with effect immediately before such record date at the conversion rate then applicable. The Company shall not make any such offer to holders of the common shares in the capital of the Company unless it makes to each Noteholder at the same time a like offer as referred to in the preceding sentence of this sub-paragraph. 6.3 No fraction of a common share shall be issued on conversion but any such fraction as would otherwise fail to be issued shall be ~~rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share~~disregarded. ~~D. In case at any time or from time to time the Corporation~~ 6.4 The Company shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available ~~out of its~~ for issue sufficient authorized but unissued common shares ~~of Common Stock, solely~~ to satisfy in full all rights for the ~~purpose~~ time being outstanding of ~~effecting~~ conversion into and subscription for common shares. 6.5 New common shares in the ~~conversion~~ capital of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing Company issued on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be ~~entitled~~ credited as fully paid and shall carry the right to receive ~~the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or~~ all dividends and (unless adjustments shall have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made in respect thereof pursuant to ~~this clause (i~~sub-paragraph 6.2 above) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof all other distributions (including, but not limited to, any issued referred to an sub-paragraph 6.2.1 above) declared, paid or made on the ~~Rights~~common shares in the capital of the Company after the date of issue of such new common shares and shall rank pari passu in all other respects and form one class with the common shares in the capital of the Company in issue on the relevant issue date. 6.6.1 If the Company commences liquidation or dissolution (whether voluntary or compulsory) it shall forthwith give notice in writing thereof to all Noteholders. Each Noteholder shall then in respect of the whole or any part of this Notes be entitled, within six weeks after the service of such notice, to elect by notice in writing to the Company to be treated as if he had converted his outstanding holding of Notes on the day immediately preceding the date of such commencement (the “Date of Election”) on the basis (including rate) of conversion then applicable (after making any appropriate adjustments pursuant to sub-paragraph 6.2 above). Subject as provided below in this sub-paragraph 6.6.1, in that event such Noteholder shall in lieu of the payments which would otherwise be due in respect of his outstanding Notes subject to an election, be entitled to participate in the assets available in the liquidation or dissolution pari passu with the common shareholders as if he were the holder of the common shares to which he would have become entitled had the Notes in respect of which he shall have made such election been converted as aforesaid. Notwithstanding the foregoing, a Noteholder making such election shall be entitled to receive and retain any payment in respect of the Notes subject to such election which shall have become due prior to the Date of Election as thought he had not made such election. For the purpose of determining the assets in which any Noteholder making an election as aforesaid shall be entitled to participate, the ~~Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance~~ provisions of ~~shares of Common Stock pursuant thereto~~ sub-paragraph 6.5 above shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed apply as if the ~~only additional shares~~ Noteholder had converted his holding of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending Notes on the ~~date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred~~ Election Date. Subject to ~~in clause (i) of~~ this sub-paragraph ~~G, then, and in each such case~~6.6.1, the conversion ~~ratio~~ rights of Noteholders shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that lapse in the event of ~~a distribution of shares of capital stock of a Subsidiary~~ the liquidation or dissolution of the ~~Corporation~~ Company. 6.6.2 If the Notes shall become immediately due and repayable in accordance with the provisions of this Instrument (~~a "Spin-Off") made to holders~~ for any reason other than the liquidation or dissolution of ~~shares of Common Stock~~the Company), the ~~numerator of such fraction~~ Company shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed forwith give notice in ~~such Spin-Off~~ writing thereof to all Noteholders. Thereupon each Noteholder shall, in respect of ~~one share~~ the whole or any part of ~~Common Stock for~~ his Notes, be entitled within six weeks after the ~~period~~ service of ~~20 Trading Days preceding~~ such ~~35th Trading Day and the denominator~~ notice to exercise his rights of ~~which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause~~ conversion (~~iii) shall be made upon the opening of business~~ with effect as on the ~~next Business Day following~~ day prior to the date on which ~~any such dividend or distribution is made~~ the Notes shall have become so due and ~~shall be effective retroactively immediately after the close of business~~ repayable) on the ~~record date fixed for~~ basis (including rate) of conversion then applicable (after making any appropriate adjustments pursuant to sub-paragraph 6.2 above) by notice in writing deposited at the ~~determination~~ registered office of ~~stockholders entitled to receive such dividend or distribution; provided, however, if~~ the ~~proviso~~ Company prior to the ~~preceding sentence applies, then such adjustment shall be made and be effective as~~ expiry of such ~~35th Trading Day after the effective date of such Spin-Off~~six weeks. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Loan Notes Agreement (Fuel Tech, Inc.)

Conversion. ~~The holders~~ (a) At any time on or prior to the Maturity Date, the Holder shall have the right to convert all, but not less than all, of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share~~ principal of ~~Series B Preferred Stock shall be convertible at~~ and accrued interest on this Note into a number (rounded down in the ~~direction of, and by notice to the Corporation from, the holders~~ case of ~~a majority~~ any fractional shares) of ~~the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000)~~ fully paid and ~~nonassessable~~ non-assessable shares of Common ~~Stock subject~~ Stock, par value $.001 per share, of the Maker (x"Common Stock") equal to ~~adjustment from time to time as provided below~~ the amount being converted divided by $0.________. [Insert closing price on date of closing.] (~~as so adjusted~~b) To effect the conversion of this Note, the ~~"conversion ratio") and (y) (prior~~ Holder shall surrender this Note to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on Maker together with a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give written notice of conversion ~~under paragraph A above,~~ specifying the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for date on which such ~~Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are~~ conversion is to be ~~issued. The Corporation shall~~effected, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which ~~such holder shall~~ date may not be ~~entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of~~ less than two business on days after the date of such notice, unless the Maker consents to an earlier date (such date, the "Conversion ~~Notice~~ Date") and a representation letter to the ~~person or persons entitled to receive~~ Maker containing customary private placement representations and warranties so that the issuance of the shares of Common Stock ~~issuable~~ upon conversion of this Note shall be exempt from registration under the Securities Act of 1933, as amended. Promptly following the Conversion Date, the Maker shall issue to the Holder the shares of Common Stock into which this Note has been converted, registered on the books of the Maker in the name of the Holder or its nominee and shall mail the certificate(s) representing such ~~conversion~~ shares to the Holder at the address specified by the Holder. From and after the Conversion Date, the Holder shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification owner of the shares of Common Stock ~~any~~ into which this Note has been converted and the certificate(s) for such shares ~~of capital stock~~ shall be issued as of the ~~Corporation~~Conversion Date. As used herein, ~~then~~"business day" means a day, ~~and~~ other than a Saturday or Sunday, on which commercial banks in ~~each such case~~Seattle are open for the general transaction of business. (c) Notwithstanding the other provisions of this Section 5, the ~~conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier,~~ principal of and accrued interest on this Note shall automatically be ~~adjusted so~~ converted into that ~~the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the~~ number of fully paid and non-assessable shares of Common Stock ~~or other securities of~~ equal to the ~~Corporation which such holder would have owned or have been entitled to receive after~~ amount being converted divided by the ~~happening~~ price per share of any shares issued or deemed to be issued in a Qualifying Financing. As used herein, the term "Qualifying Financing" means the receipt by Maker of ~~the events described above, had such shares~~ gross proceeds aggregating at least $1 million resulting from any combination of ~~Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause~~ (i) ~~shall become effective (x) in the case of any such dividend~~ sales by Maker to one or ~~distribution, immediately after the close of business on the record date for the determination of holders~~ more accredited investors of shares of its Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or and/or securities convertible ~~into~~ into, exercisable for or exchangeable for shares of Common ~~Stock~~ Stock; and (~~"Convertible Securities"~~ii) ~~having~~ licensing revenues arising under any License or Licenses, as the term License is defined in the Security Agreement, that are newly entered into after the date of the Transaction Documents. In the event that Maker engages in a Qualifying Financing solely by virtue of receiving licensing revenues pursuant to clause (ii) above, then, subject to the following sentence, this Note shall automatically be converted in accordance with the conversion price required by Section 5(a). The conversion price as required by Section 5(a) or the price per share of shares issued, if any, in a Qualifying Financing (in each case the "Conversion Price~~" (as defined below~~") ~~less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio~~ shall be appropriately adjusted ~~so that the holder of each share of Series B Preferred Stock shall be entitled to receive~~for stock splits, ~~upon the conversion thereof~~reverse stock splits, ~~the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction~~reclassifications, ~~the numerator of which shall be the sum of (1)~~ recapitalizations, or other similar occurrences affecting the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionoutstanding. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Secured Promissory Note (Northwest Biotherapeutics Inc)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows:~~ A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject (x) to adjustment from time to time as provided below (as so adjusted,~~ at the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion ~~Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed~~Ratio, at the ~~office~~ option of the ~~Corporation~~ holder in whole or of in part at any ~~transfer agent for such Series~~time after July 31, ~~and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued~~2000. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder Any conversion under this Section 5(A) shall be ~~entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to~~ of a minimum amount of the ~~close~~ lesser of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any 100 shares of Series B Preferred Stock and the number of shares of ~~Common~~ Series B Preferred Stock then held by the converting holder. The holder of the Series B Preferred Stock shall effect conversions by surrendering the certificate or certificates representing the shares of Series B Preferred Stock to be ~~issued~~ converted to the Company, together with the form of conversion notice attached hereto as Exhibit A (the "Holder Conversion Notice"), in the manner set forth in Section 5(I), which Holder Conversion Notice, once given, shall be ~~rounded down~~ irrevocable. Each Holder Conversion Notice shall specify the number of shares of Series B Preferred Stock to be converted and the ~~nearest whole share~~date on which such conversion is to be effected, ~~and~~ which date may not be prior to July 31, 2000 or the date the holder of Series B Preferred Stock delivers such Notice by facsimile (the "Holder Conversion Date"). If a holder of Series B Preferred Stock is converting less than all of the shares of Series B Preferred Stock represented by the certificate(s) tendered by such holder with the Holder Conversion Notice, the Company shall promptly deliver to such holder a certificate for such number of shares as have not been converted. B. Each share of the Series B Preferred Stock shall be ~~paid~~ convertible into shares of Common Stock at the Conversion Ratio at the option of the Company in ~~cash for any fractional share. D. In case~~ whole or in part at any time on or ~~from time~~ after July 31, 2002; PROVIDED, HOWEVER, that the Company is not permitted to ~~time~~ deliver a Company Conversion Notice (as defined below) unless on the ~~Corporation~~ Company Conversion Date (as hereinafter defined) the Common Stock is Publicly Traded; and PROVIDED, FURTHER, that the Company shall ~~pay~~ not be permitted to deliver a Company Conversion Notice within ten (10) days of issuing any ~~dividend~~ press release or ~~make any~~ other ~~distribution~~ public statement relating to such conversion. The Company shall effect such conversion by delivering to the holders of ~~its Common~~ such shares of Series B Preferred Stock to be converted a written notice in the form attached hereto as EXHIBIT B (the "Company Conversion Notice"), which Company Conversion Notice, once given, shall be irrevocable. Each Company Conversion Notice shall specify the number of shares of Series B Preferred Stock to be converted and the date on which such conversion is to be effected, which date may not be prior to July 31, 2001 or ~~other class of securities, or~~ the date the Company delivers such Notice by facsimile to the holder (the "Company Conversion Date"). The Company shall ~~offer for subscription~~ give such Company Conversion Notice in accordance with Section 5(I) below. Any such conversion shall be effected on a pro rata to basis among the holders of ~~its Common Stock or other class~~ Series B Preferred Stock. Upon the conversion of ~~securities any additional~~ shares of ~~stock of any class or any other right~~Series B Preferred Stock pursuant to a Company Conversion Notice, ~~or there shall be any capital reorganization or reclassification of~~ the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock shall surrender the certificates representing such shares at the ~~addresses of each as shown on the books~~ office of the ~~Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close~~ Company or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any ~~Transaction to which paragraph H applies~~ transfer agent for the ~~Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the~~ Series B Preferred Stock or Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not ~~invalidate any action so taken. E. From and~~ later than three (3) Trading Days after the ~~Recapitalization~~Company Conversion Date. Each of a Holder Conversion Notice and a Company Conversion Notice is sometimes referred to herein as a "Conversion Notice," and each of a "Holder Conversion Date" and a "Company Conversion Date" is sometimes referred to herein as a "Conversion Date." C. Not later than three (3) Trading Days after the Conversion Date, the ~~Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for~~ Company will deliver to the ~~purpose of effecting the conversion of the shares~~ holder of Series B Preferred ~~Stock~~Stock (i) a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those then required by law), ~~such~~ representing the number of ~~its~~ shares of Common Stock ~~as shall from time to time be sufficient to effect~~ being acquired upon the conversion of ~~all outstanding~~ shares of Series B Preferred Stock, and ~~if at any time~~ (ii) one or more certificates representing the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock not converted; PROVIDED, HOWEVER, that the Company shall not be ~~deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed~~ obligated to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue ~~by reclassification of~~ certificates evidencing the shares of Common Stock ~~any shares of capital stock of the Corporation, then, and in each such case, the~~ issuable upon conversion ~~ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder~~ of any shares of Series B Preferred Stock ~~thereafter surrendered~~ until certificates evidencing such shares of Series B Preferred Stock are either delivered for conversion to the Company or any transfer agent for the Series B Preferred Stock or Common Stock, or the holder of Series B Preferred Stock notifies the Company that such certificates have been lost, stolen or destroyed and provides a bond or other adequate security reasonably acceptable to the Company to indemnify the Company from any loss incurred by it in connection therewith. D. 1. The conversion price for each share of Series B Preferred Stock (the "Conversion Price") in effect on any Conversion Date shall be ~~entitled to receive~~ the lower of (a) the average Per Share Market Value for the five (5) Trading Days immediately preceding the Conversion Date and (b) the price per share which would, if all shares of Series B Preferred Stock outstanding on such Conversion Date were converted into Common Stock, cause the number of shares of Common Stock ~~or other securities~~ so converted by the holder, when added to any shares of ~~the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares~~ Common Stock previously issued on conversion of Series B Preferred ~~Stock been surrendered for conversion immediately prior~~ Stock, to equal fifteen percent (15%) of the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the total number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding a fully diluted basis on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionDate. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Stock Purchase Agreement (Immunogen Inc)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (i) Each share of Series ~~B Preferred~~ A Stock shall automatically be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, converted into ~~one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject~~ at the Conversion Price (as such term hereinafter defined) for such share, determined as hereafter provided, immediately upon the closing of the corporation's sale of its Common Stock in an offering pursuant to a registration statement under the Securities Act of 1933, as amended (a "Qualified IPO"). The date of such closing is hereinafter referred to as the “Automatic Conversion Date”. In connection with a Qualified IPO, prior to the initial filing of a registration statement related to the Qualified IPO, the corporation shall obtain from a person, firm or entity engaged in the business of providing evaluations or appraisals of the value of securities of companies which is selected in good faith by the Board of Directors of the corporation and is independent of the corporation (the “Valuation Firm”) a valuation of the Common Stock on a per share basis (the “Valuation Price”) For purposes hereof, the term “Conversion Price” shall mean the price equal to the product obtained by multiplying (x) ~~to adjustment from time to time as provided below (as so adjusted~~1/3, ~~the "conversion ratio") and~~ times (y) ~~(prior to the consummation~~ 80% of the ~~Recapitalization) to limitations resulting from the available~~ Valuation Price. The number of shares of Common Stock ~~which may be reserved for issuance~~ issuable upon ~~such conversion, provided ,that any~~ conversion ~~pursuant to this paragraph A~~ of ~~less than all of the outstanding shares~~ one share of Series B A Preferred ~~Stock~~ shall be ~~on a pro rata basis amongst all holders of Series B Preferred Stock~~the quotient obtained by dividing (A) $10 by (B) the Conversion Price. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for No fractional shares of Common Stock ~~are to~~ may be ~~issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to~~ issued upon the ~~nominee or nominees~~ conversion of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates any share or shares of ~~Common Stock upon conversion of shares of~~ the Series B A Preferred Stock ~~shall be made without charge for any issue~~into Common Stock, ~~stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock~~ and the number of shares of Common Stock to be issued shall be rounded ~~down~~ up to the nearest whole share~~, and the holder of Series B Preferred Stock~~ . The Conversion Price shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be appropriately adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a ~~distribution~~ reorganization, recapitalization, stock split, stock dividend, combination of ~~shares~~ shares, or similar change in the corporation's Common Stock. Except as set forth herein, neither the corporation nor any holder of ~~capital stock of a Subsidiary~~ Series A Preferred shall have the right to convert, or require the conversion of, Series A Preferred into Common Stock or any other security or property of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (corporation or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Offother person. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Preferred Stock and Warrant Purchase Agreement (China Power Equipment, Inc.)

Conversion. ~~The holders~~ (a) Following the approval by the shareholders of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at~~ Corporation, in accordance with applicable law and the ~~direction of,~~ applicable rules and ~~by notice to the Corporation from, the holders of a majority~~ regulations of the ~~outstanding shares of Series B Preferred Stock~~principal national securities exchange on which the Common Stock is listed for trading (the “National Securities Exchange”), ~~at any time, at the office~~ of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation issuance of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to ~~which such holder~~ be issued upon conversion of the Series C Preferred Stock pursuant to this Section 8 (the “Conversion Requirements”), each share of Series C Preferred Stock shall automatically convert into one share of Common Stock (the “Conversion Ratio”). (b) Any Common Stock delivered as a result of conversion pursuant to this Section 8 following satisfaction of the Conversion Requirements shall be ~~entitled as aforesaid~~validly issued, fully paid and non- assessable, free and clear of any preemptive right, liens, claims, rights or encumbrances other than those arising under the Code or the Bylaws of the Corporation. ~~Such conversion~~ Immediately following the settlement of conversion, the rights of the holders of converted Series C Preferred Stock shall ~~be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice~~ cease and the ~~person or~~ persons entitled to receive ~~the~~ shares of Common Stock ~~issuable~~ upon ~~such~~ the conversion of shares of Series C Preferred Stock shall be treated for all purposes as having become the ~~recordholder or holders~~ owners of such shares of Common Stock. Concurrently with such conversion, the converted shares of Series C Preferred Stock as shall cease to be outstanding and shall be canceled, and the shares of Series C Preferred Stock formerly designated pursuant to this Statement of Resolution shall be restored to authorized but unissued shares of Series C Preferred Stock. (c) If, after the Original Issue Date, the Corporation (i) makes a distribution on its Common Stock in cash, securities (including Common Stock) or other property or assets, (ii) subdivides or splits its outstanding Common Stock into a greater number of Common Stock, (iii) combines or reclassifies its Common Stock into a smaller number of Common Stock or (iv) issues by reclassification of its Common Stock any securities (including any reclassification in connection with a merger, consolidation or business combination in which the Corporation is the surviving person), then the Conversion Ratio in effect at the time of the record date for such distribution or of the effective date of such ~~date. The issuance~~ subdivision, split, combination, or reclassification shall be proportionately adjusted so that the conversion of ~~certificates~~ the Series C Preferred Stock after such time shall entitle the holder to receive the aggregate number of Common Stock (or shares of any securities into which such shares of Common Stock ~~upon conversion of shares of~~ would have been combined, consolidated, merged or reclassified pursuant to clauses (iii) and (iv) above) that such holder would have been entitled to receive if the Series B C Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of had been converted into Common Stock immediately prior to ~~be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time~~ such record date or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take placeeffective date, as the case may be, ~~provided that~~ and in the case of ~~any Transaction to~~ a merger, consolidation or business combination in which ~~paragraph H applies~~ the Corporation ~~shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify~~ is the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalizationsurviving person, the Corporation shall ~~at all times reserve and keep available out~~ provide effective provisions to ensure that the provisions in this Statement of ~~its authorized but unissued shares of Common Stock, solely for~~ Resolution relating to the ~~purpose of effecting the conversion of the shares of~~ Series B C Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be ~~sufficient to effect~~ abridged or amended and that the ~~conversion of all then outstanding shares of~~ Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B C Preferred Stock shall ~~be deemed given if sent by facsimile transmission~~thereafter retain the same powers, ~~by telex~~preferences and relative participating, ~~or if deposited in the United States mail, postage prepaid~~optional and other special rights, and ~~addressed to each holder of record at his~~the qualifications, ~~her or its address appearing on~~ limitations and restrictions thereon, that the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Series C Preferred Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect had immediately prior to such ~~event~~ transaction or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlierevent. An adjustment made pursuant to this ~~clause (i~~Section 8(c) shall become effective ~~(x)~~ immediately after the record date in the case of ~~any such dividend or distribution,~~ a distribution and shall become effective immediately after the ~~close of business on the record~~ effective date ~~for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y)~~ in the case of ~~any such~~ a subdivision, ~~reclassification or~~ combination, at reclassification (including any reclassification in connection with a merger, consolidation or business combination in which the ~~close~~ Corporation is the surviving person) or split. Such adjustment shall be made successively whenever any event described above shall occur. (d) Notwithstanding any of ~~business~~ the other provisions of this Section 8, no adjustment shall be made to the Conversion Ratio pursuant to Section 8(c) as a result of any of the following: (i) the grant of Common Stock or options, warrants or rights to purchase Common Stock to employees, officers or directors of the Corporation or its subsidiaries, under compensation plans and agreements approved in good faith by the Board; provided, that in the case of options, warrants or rights to purchase Common Stock, the exercise price per Common Stock shall not be less than the closing price of the Common Stock (as reported by the National Securities Exchange) on the ~~day upon which~~ date such ~~corporate action becomes effective.~~option, warrant or other right is issued; (ii) In the ~~case~~ issuance of any Common Stock as all or part of the consideration to effect (A) the closing of any acquisition by the Corporation ~~shall~~of assets of a third party or (B) the consummation of a merger, ~~after~~ consolidation or other business combination of the ~~Issue Date, issue shares of~~ Corporation with another entity in which the Corporation survives and the Common Stock ~~at a price per share~~remain outstanding to the extent such transaction(s) is or are validly approved by the vote or consent of the Board; (iii) without duplication of Section 8(d)(i) above, the issuance of options, warrants or other rights to purchase Common Stock, or securities exercisable or convertible into or exchangeable for ~~shares of~~ Common Stock (~~"Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (~~or options, warrants or other rights to purchase any such securities that are exercisable or convertible into or exchangeable for ~~a period of 15 consecutive trading days prior to such date)~~Common Stock, ~~then, and~~ in each ~~such~~ case, ~~the conversion ratio shall be adjusted so~~ that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock are outstanding on the date ~~on which such~~ of first issuance of shares ~~or Convertible Securities are issued and~~ of Series C Preferred Stock); and (2iv) the ~~number~~ issuance of ~~additional shares~~ securities for which an adjustment is made under another provision of this Section 8. (e) The Corporation shall pay any and all issue, documentary, stamp and other taxes, excluding any income, franchise, property or similar taxes, that may be payable in respect of any issue or delivery of Common Stock ~~issued~~on conversion of Series C Preferred Stock pursuant hereto. However, ~~or into which~~ the ~~Convertible Securities may convert, and the denominator~~ holder of ~~which~~ any Series C Preferred Stock shall pay any tax that is due because Common Stock issuable upon conversion thereof is issued in a name other than such holder’s name. (f) No fractional Common Stock shall be issued upon the ~~sum~~ conversion of ~~(x) the number of shares of~~ any Series C Preferred Stock. All Common Stock ~~outstanding on such date and~~ (yincluding fractions thereof) ~~the number~~ issuable upon conversion of ~~shares~~ more than one share of ~~Common~~ Series C Preferred Stock ~~which the aggregate consideration receivable~~ by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) a holder thereof shall be ~~made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For~~ aggregated for purposes of ~~this clause (ii),~~ determining whether the ~~aggregate consideration receivable by the Corporation~~ conversion would result in ~~connection with~~ the issuance of any ~~securities shall be deemed to be~~ fractional stock. If, after the ~~sum of~~ aforementioned aggregation, the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) conversion would result in the issuance of ~~any shares~~ a fraction of a Common Stock, the Corporation shall not issue a fractional Common Stock but shall round the fractional Common Stock to the nearest whole Common Stock (~~whether treasury shares or newly issued shares) pursuant to~~ and a ~~dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares~~ 0.5 of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock ~~for the period of 20 Trading Days preceding such record date, and the denominator of which~~ shall be ~~such Current Market Price per~~ rounded up to the next higher share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off). (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Purchase Agreement (Contango Oil & Gas Co)

Conversion. ~~The~~ (a) Immediately following such time as either (x) the applicable provisions of the Indenture have been amended, modified or waived in accordance with the terms of the Indenture such that the conversion of the Series A Preferred Stock would not cause a Change in Control, as determined by the Corporation and the holders of the Series B A Preferred ~~Stock shall~~ Stock, or (y) all of the Corporation’s obligations under the Indenture have ~~conversion rights as follows: A. Each share~~ been satisfied and discharged and cease to be of ~~Series B Preferred Stock shall be convertible at~~ further effect in accordance with Article 8 of the ~~direction of~~Indenture (notwithstanding the survival of the sections of the Indenture referred to in the last paragraph of Section 8.01 of the Indenture following the payment for, ~~and by notice to~~ acquisition or exchange of all of the ~~Corporation from~~Convertible Notes) (either such time, the ~~holders of a majority of~~ “Mandatory Conversion Time”), the outstanding shares of Series B A Preferred ~~Stock, at any time, at~~ Stock shall automatically convert into the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock ~~which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant~~ (the “Conversion Shares”) equal to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which ~~such holder~~ the Investors are entitled under Sections 1.01 and 1.02 of the Investment Agreement and not actually delivered at the Closing or thereafter pursuant to Section 1.03(c) of the Investment Agreement. The Conversion Shares shall be ~~entitled as aforesaid~~allocated amongst the holders of Series A Preferred Stock pro rata in accordance with their respective aggregate holdings of Series A Preferred Stock. ~~Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the~~ No fractional shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the closing price of the Common Stock on the trading day immediately preceding the date that the conversion of the Series A Preferred Stock occurs, or, if the Common Stock is not listed or admitted to trading on any national securities exchange or its bid ask prices are not published in an automated transaction reporting system, as determined in good faith by the Board. (b) All holders of record of shares of Series B A Preferred Stock shall be sent written notice of the Mandatory Conversion Time. As soon as practicable following receipt of such notice, each holder of shares of Series A Preferred Stock shall surrender his, her or its shares of Series A Preferred Stock in the manner set forth in the Corporation’s written notice of the Mandatory Conversion Time, which shall contain customary instructions for the surrender of such shares. As soon as practicable after the Mandatory Conversion Time and the surrender of the Series A Preferred Stock, the Corporation shall issue and deliver to such holder, or to his, her or its nominees, the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof, either (x) in certificated form, or (y) at such holder’s election, in electronic form via book entry transfer (free delivery) to the account(s) maintained by such holder’s broker at the Depository Trust Company as set forth in a written notice by such holder to the Corporation, in either case together with cash as provided in Section 5(a) in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Series A Preferred Stock converted. Such converted Series A Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for shareholder action) as may be necessary to reduce the authorized number of shares of ~~Common~~ Series A Preferred Stock ~~to be issued shall be rounded down~~ accordingly. All rights with respect to the ~~nearest whole share~~Series A Preferred Stock converted pursuant to Section 5(a), including the rights, if any, to receive notices and vote (other than as a holder of Common Stock) will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender the shares of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B A Preferred Stock at or prior to such time), except only the ~~addresses of each as shown on the books~~ rights of the ~~Corporation maintained by~~ holders thereof, upon surrender of their shares of Series A Preferred Stock, to receive the ~~Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken~~ items provided for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so takenthis Section 5(b). ~~E. From and after the Recapitalization, the~~ (c) The Corporation shall at all times when any shares of Series A Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued ~~shares of Common Stock~~stock, ~~solely~~ for the purpose of effecting the conversion of the ~~shares of~~ Series B A Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding ~~shares of~~ Series B A Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Investment Agreement (Pulse Electronics Corp)

Conversion. ~~The holders of the Series B Preferred Stock~~ Holder shall ~~have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice~~ surrender this Note to a common carrier for delivery to the ~~Corporation from~~Company as soon as practicable on or following the Automatic Conversion Date (or an indemnification undertaking with respect to this Note in the case of its loss, theft, destruction or mutilation in compliance with the procedures set forth in Section 18(b)). On or before the earlier of (i) the second (2nd) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case, following the Automatic Conversion Date (the “Share Delivery Date”), the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject Company shall either: (x) with respect to ~~adjustment from time~~ the issuance of Conversion Shares, either (I) issue and deliver to ~~time~~ the address of Holder as ~~provided below~~ specified on the Holder’s signature page to the Note Purchase Agreement, a certificate, registered in the name of the Holder, for the number of Conversion Shares to which the Holder shall be entitled pursuant to such conversion or (~~as so adjusted,~~ II) direct the "Company’s transfer agent (the “Transfer Agent”) to issue such number of Conversion Shares to which the Holder shall be entitled pursuant to such conversion ~~ratio")~~ in uncertificated form in the Transfer Agent’s direct registration system; and (y) ~~(prior~~ with respect to the ~~consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for~~ issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafterPre-Funded Warrant, issue and deliver ~~at such office to such holder, or~~ to the ~~nominee or nominees~~ address of ~~such holder~~Holder as specified on the Holder’s signature page to the Note Purchase Agreement, a ~~certificate or certificates for~~ Pre-Funded Warrant issued in the name of the Holder to purchase the number of shares of Common Stock to which ~~such holder~~ the Holder shall be entitled as ~~aforesaid~~determined in accordance with Section 3(a)(i). ~~Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person~~ The Person or ~~persons~~ Persons entitled to receive the ~~shares of Common Stock issuable upon such conversion~~ Conversion Shares shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such Conversion Shares on the Conversion Date, irrespective of the date of delivery of the certificates (or issuance of shares ~~of Common Stock as of~~ in the Transfer Agent’s direct registration system) evidencing such ~~date~~Conversion Shares. The ~~issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue~~Company’s obligations to issue and deliver the Conversion Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, ~~stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion~~ irrespective of any ~~shares of Series B Preferred Stock and~~ action or inaction by the ~~number of shares of Common Stock~~ Holder to ~~be issued shall be rounded down~~ enforce the same, any waiver or consent with respect to any provision hereof, the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock recovery of any ~~class~~ judgment against any Person or any ~~other right, or there shall be any capital reorganization or reclassification of~~ action to enforce the ~~Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation~~same, or any ~~sale~~ setoff, counterclaim, recoupment, limitation or ~~conveyance~~ termination. While any Notes are outstanding, the Company shall use its reasonable best efforts to ~~another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be~~ use a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that participates in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so takenDTC Fast Automated Securities Transfer Program. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Security Agreement (Eterna Therapeutics Inc.)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each share of ~~Series B~~ Preferred Stock shall be ~~convertible at the direction of~~convertible, ~~and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock~~in whole or in part, at any ~~time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid~~ time and ~~nonassessable shares of Common Stock subject (x) to adjustment~~ from time to time ~~as provided below (as so adjusted,~~ from and after the ~~"conversion ratio")~~ Funding Date and ~~(y) (~~prior to their redemption, at the ~~consummation~~ option of the ~~Recapitalization~~Holder thereof, at a rate equal to the quotient of (i) $10.00, divided by (ii) the product of (A) .80 multiplied by, (B) the volume weighted average price for the 20 trading days during the 30-day period immediately prior to ~~limitations resulting from~~ such conversion, provided that in no event shall the ~~available~~ denominator be less than $6.00 per share (the “Conversion Rate”). Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by e-mail such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date such Notice of Conversion to the Corporation is deemed delivered hereunder. Upon delivery of the Notice of Conversion by a Holder, such Holder shall be deemed for all corporate purposes to have become the holder of record of the Conversion Shares with respect to which the Preferred Stock has been converted, irrespective of date of delivery of such Conversion Shares. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. Shares of Preferred Stock converted into Common Stock ~~which may~~ or redeemed in accordance with the terms hereof shall be ~~reserved for issuance upon such conversion~~canceled and shall not be reissued. In addition, ~~provided ,that any conversion pursuant to this paragraph A of less than~~ all of the outstanding shares of ~~Series B~~ Preferred Stock shall ~~be on a pro rata basis amongst all holders~~ mandatorily and automatically convert into shares of ~~Series B Preferred Stock. After consummation of~~ Common Stock in accordance with this Section 7 upon the ~~Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders~~ affirmative vote of a majority of the issued and outstanding shares of Series ~~B Preferred Stock give notice of conversion under paragraph~~ A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Convertible Preferred Stock and ~~the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B~~ Preferred Stock ~~shall be paid in cash for any fractional share~~voting as a single class. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Subscription Agreement (Binah Capital Group, Inc.)

Conversion. ~~The holders of the Series B Preferred Stock shall have conversion rights as follows: A.~~ (a) Each share of Series B C Preferred Stock shall be ~~convertible~~ convertible, at the ~~direction of, and by notice to the Corporation from, the holders of a majority~~ option of the ~~outstanding shares of Series B Preferred Stock,~~ holder at any time, ~~at the office of the Corporation or any transfer agent for such Series,~~ into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available that number of shares of Common Stock equal to the Series C Liquidation Value divided by the Fair Market Value, as described below, per share of Common Stock on the date of notice of conversion (the "Series C Conversion Ratio"). For purposes of this Section 4B (vi)(a), Fair Market Value means the average of the closing sale price for the Common Stock for the twenty (20) business days prior to the date of conversion as reported on the largest securities exchange on which ~~may be reserved~~ such shares are listed; and if not so listed, as reported on Nasdaq National or Small Cap market and if such shares are not listed on either a national securities exchange or on the Nasdaq National or Small Cap markets, then on the Nasdaq Bulletin Board, and if the Common Stock is not, for ~~issuance upon such~~ the twenty (20) business days prior to the date of conversion, ~~provided ,that~~ quoted on the bulletin board, any ~~conversion pursuant to this paragraph A of less than all~~ national exchange or automated quotation system, means the value determined by the independent members of the ~~outstanding~~ Board of Directors of the Corporation. Independent members shall mean those directors who are not affiliates of Harvest Partners III, L.P. or the Chief Executive Officer of the Corporation. (b) Each conversion of shares of Series B C Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding into shares of ~~Series B Preferred~~ Common Stock ~~give notice~~ will be effected by the surrender of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates ~~therefor duly endorsed,~~ representing the shares to be converted at the principal office of the Corporation (or such other office or agency of the Corporation as the Corporation may designate in writing to the holders of the Series C Preferred Stock) at any ~~transfer agent for~~ time during normal business hours. Each conversion will be deemed to have been effected as of the close of business on the date on which such ~~Series~~certificate or certificates were surrendered. At such time, the rights of the holder of the converted Series C Preferred Stock (in its capacity as such) will cease and ~~shall state therein~~ the person or persons or entity or entities in whose name or names ~~in which~~ the certificate or certificates for shares of Common Stock are to be ~~issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at~~ issued upon such ~~office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such~~ conversion ~~shall~~ will be deemed to have ~~been made immediately prior to~~ become the ~~close~~ holder or holders of ~~business on the date~~ record of ~~such Conversion Notice and the person or persons entitled to receive~~ the shares of Common Stock represented thereby. (c) Following each surrender of certificates pursuant to paragraph (b) above, the Corporation will issue and deliver, in accordance with the surrendering holder's instructions, (x) the certificate or certificates for Common Stock issuable upon such ~~conversion shall~~ conversion, and (y) any cash payment required to be ~~treated for all purposes as the recordholder or holders~~ made pursuant to Part (vi)(a) of ~~such shares of Common Stock as of such date.~~ Section 4B. (d) The issuance of certificates or representing shares of Common Stock upon conversion of any shares of Series B C Preferred Stock ~~shall~~ will be made without charge to the holders of such converted or newly issued shares for any ~~issue, stamp or other similar~~ issuance tax in respect of thereof or other cost incurred by the Corporation in connection with such ~~issuance. C. No fractional shares shall be issued upon~~ conversion ~~of any shares of Series B Preferred Stock~~ and the ~~number~~ related issuance of shares of Common ~~Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share~~Stock. ~~D. In case at any time or from time to time the~~ (e) The Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall will at all times reserve and keep available out of its authorized but unissued shares of Common ~~Stock, solely~~ Stock the number of such shares sufficient for ~~the purpose of effecting the~~ issuance upon conversion of the ~~shares of~~ Series B C Preferred ~~Stock, such number of~~ Stock hereunder. (f) The Corporation will not close its ~~shares~~ books against the transfer of Common Stock ~~as shall from time to time be sufficient to effect~~ in any manner which would interfere with the timely conversion of ~~all outstanding shares of~~ Series B C Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (ig) In ~~case~~ the ~~Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on~~ event the outstanding shares of Common Stock shall, after the determination of the Series C Conversion Ratio be further subdivided (split), or combined (reverse split), by reclassification or otherwise, or in the event of any dividend or other distribution payable on the Common Stock or Junior Securities in shares of Common Stock, ~~(B) subdivide the outstanding shares of~~ Common Stock ~~into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares~~ Instruments or ~~(D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation~~Junior Securities, then, ~~and~~ in each such case, the ~~conversion ratio~~ Series C Conversion Ratio in effect immediately prior to such event ~~or the record date therefor, whichever is earlier,~~ shall be adjusted so that ~~the~~ each holder of ~~any~~ shares of Series B C Preferred Stock ~~thereafter surrendered~~ shall have the right to convert its shares of Series C Preferred Stock into the number of shares of the Common Stock which it would have owned after the event had such shares of Series C Preferred Stock been converted immediately before the happening of such event. Any adjustment under this Part (vi)(g) of Section 4B shall become effective as of the date and time the subdivision or combination becomes effective. (h) In connection with any merger, consolidation, recapitalization, reorganization or similar transactions in which holders of Common Stock generally receive, or are given the opportunity to receive, consideration for ~~conversion~~ their shares, then, in all such circumstances, unless otherwise approved by a majority of the holders of the then outstanding shares of Series C Preferred Stock voting as a separate class, all holders of Series C Preferred Stock shall be entitled to receive the ~~number of~~ same consideration per share for their shares ~~of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had~~ (calculated as if such shares of Series B C Preferred ~~Stock~~ Stock, including cumulative dividends thereon, whether declared or paid, had been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business converted on ~~the record date for the determination of holders of~~ a one-for-one basis into shares of Common ~~Stock entitled to receive such dividend or distribution, or (y~~Stock) in as is received by the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares holders of Common ~~Stock at a price per share~~Stock, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, ~~the Rights~~form, ~~the Series B Preferred Stock, the Series C Preferred Stock~~ amount and ~~the Warrants) nor (B) the issuance~~ timing of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionpayment. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Investment Agreement (Lund International Holdings Inc)

Conversion. ~~The holders~~ (a) Prior to the Maturity Date, the then outstanding unpaid principal amount of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of,~~ Loan (including any accrued and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock unpaid interest as of such date~~. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock~~ ) shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification convert into Equity Securities of the ~~Common Stock of the~~ Surviving Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the ~~addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which~~ applicable Conversion Price (ia “Conversion”) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) ~~In case~~ in respect of any outstanding unpaid principal amount of the ~~Corporation shall at~~ Loan (including any ~~time or from time to time after the Issue Date~~ accrued and unpaid interest thereon) owned by Ares: (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of ~~any such dividend or distribution~~the Initial Term Loan and Delayed Draw Term Loan (and not, ~~immediately after the close of business on the record date~~ for the ~~determination~~ avoidance of ~~holders~~ doubt, the Converted SAFE Term Loan), automatically immediately prior to the consummation of ~~shares of Common Stock entitled to receive such dividend or distribution, or~~ a Business Combination; (yB) in the case of ~~any such subdivision~~the Converted SAFE Term Loan, ~~reclassification or combination, at~~ upon the ~~close~~ election of ~~business on the day upon~~ ▇▇▇▇ in its sole discretion (which such ~~corporate action becomes effective.~~election shall be made by written notice to the Borrower at least five (5) Business Days prior to the consummation of a Business Combination), immediately prior to the consummation of a Business Combination; or (C) upon the election of Ares in its sole discretion, immediately prior to or at any time following the consummation of a Qualified IPO; (ii) In in respect of any outstanding unpaid principal amount of the ~~case the Corporation shall~~Loan (including any accrued and unpaid interest thereon) owned by any Person other than Ares, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days automatically immediately prior to the consummation of a Business Combination or a Qualified IPO. (b) Notwithstanding the foregoing, if the Surviving Corporation is not the Borrower, in connection with any Conversion pursuant to Section 16(a), (i) the Loan (including any accrued and unpaid interest as of such date) will automatically convert into Equity Securities of the Borrower or any successor-in-interest of Borrower, and then (ii) such Equity Securities of the Borrower or successor in interest of the Borrower shall be exchanged into equivalent Equity Securities or Warrants of the Surviving Corporation in connection with such Business Combination or Qualified IPO. The number and type of Equity Securities of the Borrower initially received by Lender in accordance with the foregoing shall be a number and amount such that, upon consummation of the Qualified IPO or Business Combination, Lender receives a number of Equity Securities or Warrants of the Surviving Corporation equal to the number that Lender would have received had the Loan (including any accrued and unpaid interest as of such date), been converted directly into Equity Securities or Warrants of the Surviving Corporation at the then~~, and~~ -applicable Conversion Price. If the Conversion Price is adjusted in ~~each such case~~accordance with clause (c)(i) or (c)(ii) of the definition of Conversion Price, the ~~conversion ratio shall be adjusted so that the holder~~ type of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) Equity Securities a ~~fraction, the numerator of which~~ Lender receives in accordance with this Section 16.1 shall be the ~~sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities~~ same as are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionapplicable PIPE Transaction. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Second Lien Loan and Security Agreement (Kodiak Robotics, Inc.)

Conversion. ~~The holders~~ In compliance with the provisions of the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of~~Indenture, ~~and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at any time, at the office of the Corporation~~ on or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the ~~date~~ Business Day immediately preceding the Maturity Date of ~~such~~ this Note, the Holder hereof has the right, at its option, to convert each $1,000 principal amount of this Note into Common Stock based on an initial Conversion ~~Notice and the person or persons entitled to receive the~~ Rate of 172.4138 shares of Common Stock ~~issuable upon~~ per $1,000 principal amount of Notes (a Conversion Price of approximately $5.80 per share), as the same may be adjusted pursuant to the terms of the Indenture, as such ~~conversion~~ shares shall be ~~treated~~ constituted at the date of conversion, upon surrender of this Note (if in certificated form) with the form entitled “Conversion Notice” on the reverse hereof duly completed and manually signed, to the Company at the office or agency of the Company maintained for ~~all purposes as~~ that purpose in accordance with the ~~recordholder~~ terms of the Indenture, or ~~holders~~ at the option of such Holder, the Corporate Trust Office, together with any funds required pursuant to the terms of the Indenture, and, unless any shares issuable on conversion are to be issued in the same name as this Note, duly endorsed by, or accompanied by instruments of ~~Common Stock as of~~ transfer in form satisfactory to the Company duly executed by, the Holder or by such ~~date~~Holder’s duly authorized attorney. ~~The issuance of certificates or shares of Common Stock~~ Such Holder will also be entitled, if applicable, to receive upon conversion of ~~shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of~~ such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or Holder’s Notes into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to ~~such other remedies as shall be availableto~~ the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares Shares of Common Stock, ~~(B) subdivide~~ a payment in cash equal to the ~~outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification~~ amount of the ~~shares of Common Stock~~ Interest Make-Whole, subject to the Interest Make-Whole Cap. In order to exercise the conversion right with respect to any ~~shares of capital stock~~ interest in a Global Note, the Holder must complete the appropriate instruction form pursuant to the Depositary’s book-entry conversion program, deliver by book-entry delivery an interest in such Global Note, furnish appropriate endorsements and transfer documents if required by the Company or the Trustee or Conversion Agent, and pay the funds, if any, required pursuant to the terms of the ~~Corporation~~Indenture. As specified in the Indenture, ~~then, and in each such case~~upon conversion, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, Company will issue shares of Common Stock at based on the Conversion Rate, as adjusted as specified in the Indenture. Prior to the Maturity Date if and only to the extent holders elect to convert the Notes in connection with a ~~price per share~~Non-Stock Change of Control, ~~or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "~~the Company will increase the Conversion ~~Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior~~ Rate applicable to such ~~date)~~converting Notes as set forth in the Indenture. No adjustment in respect of interest on any Notes converted or dividends on any shares issued upon conversion of such Notes will be made upon any conversion except as set forth in the next sentence and the next paragraph. If this Note (or portion hereof) is surrendered for conversion during the period from the 5:00 p.m., ~~then~~New York City time, ~~and~~ on any applicable Record Date for the payment of interest to 5:00 p.m., New York City time, on the Business Day preceding the corresponding Interest Payment Date, this Note (or portion hereof being converted) must be accompanied by payment, in ~~each~~ immediately available funds or other funds acceptable to the Company, of an amount equal to the interest otherwise payable on such ~~case~~Interest Payment Date on the principal amount being converted; provided, ~~the conversion ratio~~ that no such payment shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of required (1) if the ~~number of shares of Common Stock outstanding~~ Holder surrenders this Note in connection with a Fundamental Change and the Company has specified a Fundamental Change Repurchase Date that is after a Record Date and on or prior to the ~~date on which such shares~~ corresponding Interest Payment Date or ~~Convertible Securities are issued and~~ (2) to the ~~number~~ extent of ~~additional~~ any overdue interest, if any overdue interest exists at the time of conversion with respect to this Note. No fractional shares will be issued upon any conversion of ~~Common Stock issued~~Notes, ~~or into~~ but an adjustment and payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the ~~Convertible Securities may convert, and the denominator~~ surrender of any Notes for conversion. A Note in respect of which ~~shall~~ a Holder is exercising its right to require repurchase may be ~~the sum of (x) the number of shares of Common Stock outstanding on~~ converted only if such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of Holder validly withdraws its election to exercise such ~~Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant~~ right to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined require repurchase in accordance with ~~generally accepted accounting principles, during~~ the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors terms of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-OffIndenture. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Note Agreement (Cereplast Inc)

Conversion. ~~The holders~~ i. Each Preference Share shall convert in accordance with the provisions of ~~the Series B Preferred Stock shall have conversion rights as follows~~this Article 4: ~~A. Each share of Series B Preferred Stock shall be convertible~~ 1. at the ~~direction of, and by notice to the Corporation from, the holders~~ election of ~~a majority of the outstanding shares of Series B Preferred Stock,~~ its Holder at any ~~time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid~~ time and ~~nonassessable shares of Common Stock subject (x) to adjustment~~ from time to time including, for the avoidance of doubt, at any time during the period between a Redemption Notice Date and a Redemption Date as ~~provided below~~ set out in Article 5(a); or 2. immediately before a Qualified IPO (but not an IPO that is not a Qualified IPO) upon the underwriting agreement becoming unconditional in all respects; or 3. prior to an IPO, if any rules, regulations, ruling or requirements of the Stock Exchange do not allow the continuing existence of the Preference Shares following the IPO, and in which case the Preference Shares shall be converted into some other similar instruments to be agreed to by the Holder, with substantially the same rights as ~~so adjusted~~the Preference Shares and as permitted by the Stock Exchange. For the avoidance of doubt, the "foregoing conversion ~~ratio"~~or exchange shall not be mandatory and shall be at the sole discretion of the Holders. Each Preference Share being converted shall convert into such number of fully paid Shares as determined by dividing (x) ~~and~~ the Subscription Price for each Preference Share by (y) ~~(prior~~ the then prevailing Conversion Price. The initial Conversion Price shall be equal to the ~~consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may~~ Subscription Price and shall thereafter be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment in accordance with Article 4(h) and 4(i). ii. In this Article 4, a "Conversion Date" is the date on which a Holder requires any or all of its Preference Shares to be converted as ~~provided~~ set out in ~~paragraph VIII.G.~~a Conversion Notice (or if the Holder requires his Preference Shares to be converted on a day which is not a Business Day, the next Business Day) or (if mandatory conversion occurs upon a Qualified IPO) the day on which the underwriting agreement becomes unconditional in all respects. ~~B. If the holders~~ iii. A Holder may convert any or all of ~~a majority of the outstanding shares of Series B Preferred Stock give~~ his Preference Shares, as set out in Article 4(a)(i), by serving notice of conversion ~~under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock~~ (a "Conversion Notice")) together with his relevant share certificate on the Company at least ten Business Days before the relevant Conversion Date. ~~Following receipt of a~~ A Conversion ~~Notice,~~ Notice once given may not be withdrawn without the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issuedCompany's written consent. The ~~Corporation shall~~conversion of all the Preference Shares, as ~~soon as practicable thereafter~~set out in Article 4(a)(ii), ~~issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder~~ shall be ~~entitled as aforesaid. Such conversion~~ automatic and each Holder shall be deemed to have ~~been made immediately prior~~ served a Conversion Notice on the Company and shall be bound to deliver the certificate for his Preference Shares to the ~~close of business on~~ Company as soon as practicable after the ~~date of such~~ Qualified IPO and in any event within seven days thereafter. iv. The Conversion ~~Notice and the person or persons~~ Shares to which a Holder is entitled ~~to receive the shares of Common Stock issuable~~ upon ~~such conversion~~ conversion: 1. shall be ~~treated for~~ validly issued and delivered, credited as fully paid and free of all ~~purposes as~~ Encumbrances; 2. shall rank pari passu in all respects and form one class with the ~~recordholder~~ Shares then in issue; and 3. shall entitle the Holder to be paid an appropriate proportion of all dividends and other distributions declared, made or ~~holders of such shares of Common Stock as of such date~~paid on Shares after the Conversion Date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided Company covenants that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall it will at all times reserve and ~~keep available out of its authorized but unissued shares of Common Stock~~maintain authority to issue, solely for the purpose of ~~effecting~~ issue or delivery upon any conversion herein provided, the ~~conversion of the shares of Series B Preferred Stock, such~~ maximum number of ~~its shares of Common Stock as shall from time to time be sufficient to effect the~~ Shares issuable upon conversion of all ~~outstanding shares~~ Preference Shares. v. The allotment of ~~Series B Preferred Stock~~Conversion Shares shall be made on the relies ant Convess-csa Date. A certificate for Conversion Shares shall be sent as soon as practicable after the relevant Conversion Date to the Holder without charge and, if a fractional entitlement results from the conversion, a cheque in respect of such fractional entitlement shall also be sent. In the meantime, transfers of Conversion Shares shall be certified against the register. vi. Subject to the terms of the Preference Shares as set out herein and ~~if at~~ the Companies Ordinance, the Board may in its absolute discretion use any ~~time the number of authorized but unissued shares of Common Stock shall not be sufficient~~ means available under law to effect conversion in accordance with the terms hereunder. vii. No fractions of Shares shall be allotted or issued to a Holder upon conversion. All Shares (including fractions thereof) issuable upon conversion of more than one Preference Share held by a Holder thereof shall be aggregated for purposes of determining whether the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, would result in the ~~opinion~~ issuance of ~~its counsel~~any fractional Share. If, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such caseaforementioned aggregation, the conversion ~~ratio~~ would result in ~~effect immediately prior~~ the issuance of any fractional Share, the Company shall, in lieu of issuing any fractional share, pay cash equal to the product of such ~~event or~~ fraction multiplied by the ~~record~~ fair value of one Share on the date ~~therefor~~of conversion. Fair value shall be determined in good faith by the Board. viii. Subject to Article 4(i), ~~whichever is earlier~~if any of the following events occur, the Conversion Price shall be adjusted so that the ~~holder of any shares of Series B Preferred Stock thereafter surrendered for conversion~~ Holder shall be entitled to receive ~~the~~ such number of ~~shares of Common Stock or other securities~~ Conversion Shares (expressed as a percentage of the ~~Corporation which such holder~~ Fully Diluted Share Capital) as it would ~~have owned or~~ have been entitled to receive after such event had the ~~happening of any of the events described above, had such shares of Series B Preferred Stock~~ Preference Shares been ~~surrendered for conversion~~ converted immediately prior to such event: 1. the ~~happening~~ Company issues further shares in the capital of the Company on an allotment of fully paid Shares pursuant to a capitalisation of profits or reserves to holders of Shares (provided that no adjustment to the Conversion Price shall be made when Shares are allotted by way of capitalisation of profits or reserves at the election of the shareholder instead of cash in respect of all or part of a dividend or dividends; in which case, an adjustment, for such ~~event~~ allotment shall be handled in accordance with Article 4(i); 2. there is a consolidation or sub-division (or both) of Shares or of. Ordinary Equivalents; 3. there is an issue of Ordinary Share Equivalents in a- reclassification of Shares, other than as contemplated in Article 4(i); or 4. the ~~record date therefor, whichever~~ share capital of the Company is ~~earlier~~altered in any other way whatsoever not otherwise dealth with in this Article 4. An adjustment made pursuant to this ~~clause (i~~Article 4(b) shall become effective (x) in the case of any such ~~dividend~~ issue or distribution, on the date immediately ~~after~~ following the close of business on the record date for the determination of holders of ~~shares of Common Stock~~ Shares entitled to receive such dividend or ~~distribution, or~~ distribution car (yv) in the case of any such subdivision, alteration, combination or reclassification ~~or combination, at~~ to the close of business on the day upon which such corporate action becomes effective. ix. If the Company issues or tierces to issue farther Shares or Ordinssy Shore Equivalents of the Company excluding (i) any Shares (or options representing any Shares) issued to employees, officers or directors o!" the Comp @n;' pursuant to employee share purchase or option or grant plans or agreements or other incentive share arrangements approved by the Board and any one of the Holders and (ii) In any shares issued in an IPO (including a Qualified IPO) (the ~~case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock (~~"~~Convertible Securities~~Additional Shares") ~~having~~ without consideration or for a ~~"Conversion Price" (as defined below)~~ consideration per share less than the ~~Current Market~~ prevailing Conversion Price ~~(for a period of 15 consecutive trading days prior to~~ then in such ~~date), then, and in each such case,~~ circumstances the ~~conversion ratio~~ Conversion Price shall be adjusted ~~so that~~ as follows: where 1. A is the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the revised Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.adjustment;

Appears in 1 contract

Sources: Subscription and Share Purchase Agreement (Mindray Medical International LTD)

Conversion. ~~The holders~~ (i) Each Purchaser has the right, at its option, in connection with any Future Round, to convert all or any portion of the ~~Series B Preferred Stock shall have~~ outstanding principal of the Notes held by such Purchaser together with all unpaid accrued interest on such Notes and any and all unpaid Risk Premium Amount, into fully-paid and non-assessable shares of New Securities, on terms consistent with those of such Future Round. In addition, each Purchaser has the right, at its option, from and after any Future Convertible Debt Issuance, to convert all or any portion of the outstanding principal of the Notes held by such Purchaser together with all unpaid accrued interest on such Notes and any and all unpaid Risk Premium Amount, into fully-paid and non-assessable shares of New Securities on terms consistent with the conversion ~~rights as follows: A. Each share~~ provisions of ~~Series B Preferred Stock~~ the debt securities issued in such Future Convertible Debt Issuance. Notwithstanding any provision of this Agreement to the contrary, no New Securities shall be issuable upon conversion of the Notes unless (i) the New Securities issued upon conversion of Notes are issued at or above the greater of the book or market value of the common stock of the Company as of the date of this Agreement (adjusted proportionately in the event that the New Securities are not shares of common stock of the Company or are not convertible into shares of common stock of the Company on a 1:1 basis), (ii) that the issuance of such New Securities upon conversion of Notes will not, (A) if any stockholder at the ~~direction of~~time of such conversion holds 20% or more of the outstanding common stock of the Company or voting power of the Company’s securities, result in the largest stockholder immediately prior to such conversion ceasing to be the largest stockholder of the Company immediately following such conversion, or, (B) if no stockholder at the time of such conversion holds 20% or more of the outstanding common stock of the Company or voting power of the Company’s securities, result in any stockholder holding 20% or more of the outstanding common stock of the Company or voting power of the Company’s securities immediately following such conversion and (iii) the issuance of such New Securities is in compliance with the Voting Rights Policy of the NASDAQ Stock Market. In order to exercise this optional conversion privilege, the holder of the Note shall surrender such Note to the Company in connection with the closing of the applicable Future Round or at or following the closing of the applicable Future Convertible Debt Issuance, accompanied by written notice to the ~~Corporation from~~Company in the form attached hereto as Exhibit E indicating, the ~~holders of a majority~~ amount of the ~~outstanding shares of Series B Preferred Stock~~principal, ~~at any time~~unpaid accrued interest and/or Risk Premium Amount with respect to which the holder elects to exercise the optional conversion right and, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the ~~consummation~~ extent the Notes are entitled to more than one type of ~~the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any~~ conversion right pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the RecapitalizationSection 2.1(d), the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice which types of conversion ~~under paragraph A above,~~ rights the ~~Corporation~~ holder wishes to exercise and in what amounts. Such notice shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall also state ~~therein~~ the name or names (with address) in which the certificate or certificates for shares of ~~Common Stock are to~~ New Securities which shall be issuable on such conversion shall be issued. ~~The Corporation shall~~Assuming the satisfaction of the conditions specified in clauses (i) through (iii) of the third sentence of this paragraph with respect to the conversions requested in the aggregate by Purchasers in connection with a Future Round and with respect to any individual conversion relating to a Future Convertible Debt Issuance, as ~~soon~~ promptly as practicable ~~thereafter~~after the surrender of the applicable Note for conversion, ~~issue~~ the receipt of the notice specified above and the closing of the Future Round or Future Convertible Debt Issuance, as applicable, the Company shall deliver or cause to be delivered at ~~such~~ its principal executive office to ~~such~~ the holder, or to on the ~~nominee or nominees of such~~ holder’s written order, a certificate or certificates for the number of full shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock New Securities issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, thenconversion, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by accordance with the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlierhereof. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) If less than the ~~Current Market Price (for a period~~ entire outstanding principal amount of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable ~~conversion ratio on the day immediately prior to such date by (B)~~ Note is being converted, a ~~fraction, the numerator of which~~ new Note shall promptly be ~~the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are~~ issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the ~~Corporation~~ Company and delivered to the applicable Purchaser for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made unconverted principal balance and shall be ~~effective retroactively immediately after the close~~ of ~~business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed~~ like tenor as to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation all terms as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.the

Appears in 1 contract

Sources: Subordination Agreement (Helicos Biosciences Corp)

Conversion. ~~The holders~~ (a) Subject to the provisions for adjustments hereinafter set forth, each share of the Series ~~B Preferred Stock shall have conversion rights as follows: A. Each share of Series B~~ E Preferred Stock shall be convertible at the ~~direction of, and by notice to~~ option of the ~~Corporation from,~~ holder thereof or upon the affirmative vote of the holders of a majority of the outstanding shares of Series B E Preferred Stock, at any time, at in the ~~office of the Corporation or any transfer agent for such Series~~manner hereinafter set forth, into ~~one thousand (1,000)~~ a number of fully paid and nonassessable shares of Common Stock ~~subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation~~ of the ~~Recapitalization) to limitations resulting from~~ Corporation computed by multiplying the ~~available~~ number of ~~shares of Common Stock which may be reserved for issuance upon~~ such ~~conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding~~ shares of Series B E Preferred Stock to be converted by the Liquidation Preference Amount (such amount to be adjusted proportionately in the event the shares of Series E Preferred Stock are adjusted into a lesser number or subdivided into a greater number) and dividing the result by the Conversion Price. The Conversion Price per share of Series E Preferred Stock shall initially be ~~on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph~~ $1.06 which price shall be ~~"1",~~ subject to adjustment as provided ~~in paragraph VIII.G. B. If the holders of a majority of the outstanding shares~~ herein. In addition, each share of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B E Preferred Stock shall ~~surrender the certificate or certificates therefor duly endorsed, at the office~~ automatically be converted into such number of ~~the Corporation or of any transfer agent for such Series,~~ fully paid and ~~shall state therein the name or names in which the certificate or certificates for~~ nonassessable shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation ~~or consolidation or merger~~ upon the consummation of an underwritten secondary public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale by the Corporation ~~with or into another corporation, or any sale or conveyance to another corporation~~ of ~~the property~~ shares of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) its Common Stock to the ~~registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on~~ public which (i) ~~the books of~~ results in net proceeds to the Corporation ~~shall close or a record shall be taken for such stock dividend~~of at least $15,000,000 (after underwriting discounts and selling commissions but prior to legal, ~~distribution or subscription rights or~~ accounting and other transaction costs and expenses) and (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction is offered at a price per share equal to ~~which paragraph H applies the Corporation shall give~~ at least ~~30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders~~ 300% of the ~~Common Stock of record shall participate in said dividend, distribution or subscription rights or~~ then Conversion Price (a "Qualified Financing"). (b) The Conversion Price shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment adjusted from time to time as follows: (i) ~~In case~~ If the Corporation ~~shall~~ at any time subdivides (by stock split, stock dividend, recapitalization or ~~from time to time after the Issue Date (A~~otherwise) ~~pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the~~ its outstanding shares of Common Stock into a ~~larger~~ greater number of ~~shares of Common Stock~~shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced, and if the Corporation at any time combines (Cby reverse stock split or otherwise) ~~combine the~~ its outstanding shares of Common Stock into a smaller number of ~~shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case~~shares, the ~~conversion ratio~~ Conversion Price in effect immediately prior to such ~~event~~ combination will be proportionately increased. (ii) If the Corporation shall consolidate or merge into or with another corporation, or if the ~~record date therefor~~Corporation shall sell or convey to any other person or persons all or substantially all the property of the Corporation, ~~whichever is earlier~~or if the Corporation shall effect a capital reorganization or reclassification of its Common Stock, ~~shall be adjusted so that the~~ or other Liquidity Event, then each holder of ~~any~~ Series E Preferred Stock then outstanding shall have the right thereafter to convert each share of Series E Preferred Stock held by him into the kind and amount of shares of ~~Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive~~ stock, other securities, cash, and property receivable upon such consolidation, merger, sale, conveyance, reorganization, reclassification or other Liquidity Event by a holder of the number of shares of Common Stock into which such share of Series E Preferred Stock might have been converted immediately prior to such consolidation, merger, sale, conveyance, reorganization, reclassification or other ~~securities~~ Liquidity Event and shall have no other conversion rights. In any such event, effective provision shall be made, in the certificate or articles of incorporation of the ~~Corporation which such holder would have owned~~ resulting or ~~have been entitled to receive after~~ surviving corporation or otherwise or in any contracts of sale and conveyance so that, so far as appropriate and as nearly as reasonably may be, the ~~happening of any~~ provisions set forth herein for the protection of the ~~events described above, had such~~ conversion rights of the shares of Series B E Preferred Stock ~~been surrendered for conversion immediately prior to the happening of such~~ shall thereafter be made applicable. Such adjustments shall be made successively whenever any event ~~or the record date therefor~~listed above shall occur. (iii) If, ~~whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately~~ after the ~~close~~ date of ~~business on~~ the ~~record date for the determination of holders~~ original issuance of shares of ~~Common Stock entitled to receive such dividend or distribution~~Series E Preferred Stock, ~~or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case~~ the Corporation ~~shall~~issues, ~~after the Issue Date, issue shares of Common~~ grants or sells any Additional Stock ~~at a price per share, or securities convertible into or exchangeable for shares of Common Stock~~ as hereinafter defined (~~"Convertible Securities") having a "Conversion Price" (~~other than as ~~defined~~ set forth below) for a consideration per share less than the ~~Current Market~~ applicable Conversion Price, then upon such issue or sale the Conversion Price ~~(for a period of 15 consecutive trading days prior~~ will be reduced in order to ~~such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof,~~ increase the number of shares of Common Stock into which the Series E Preferred Stock is convertible to that price per share determined by multiplying ~~(A)~~ the ~~applicable conversion ratio on the day~~ Conversion Price in effect immediately prior to such ~~date~~ issuance or sale by a fraction (Bx) ~~a fraction,~~ the numerator of which shall be ~~the sum of (1)~~ the number of shares of Common Stock outstanding on immediately prior to the ~~date on which~~ issuance or sale of such ~~shares or Convertible Securities are issued and (2) the number of additional shares of~~ Common ~~Stock issued~~Stock, ~~or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x)~~ plus the number of shares of Common Stock issuable upon conversion of all of the shares of Series E Preferred Stock outstanding on immediately prior to the issuance or sale of such ~~date and (y)~~ Common Stock, plus the number of shares of Common Stock which the aggregate consideration ~~receivable~~ (if any) received by the Corporation ~~for~~ in such issuance or sale would purchase at the ~~total number~~ then effective Conversion Price, and (y) the denominator of ~~shares of Common Stock so issued, or~~ which shall be the number of shares of Common Stock ~~which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant~~ outstanding immediately prior to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, plus the number of shares of Common Stock ~~determined by multiplying (1)~~ issuable upon conversion of all of the ~~applicable conversion ratio on the day~~ shares of Series E Preferred Stock outstanding immediately prior to the ~~record date fixed for~~ issuance or sale of such Common Stock, plus the ~~determination~~ number of ~~stockholders entitled to receive~~ such ~~dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share~~ shares of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend so issued or ~~distribution~~sold; provided, however, that ~~in the event of a distribution of~~ additional shares of ~~capital stock of a Subsidiary of the Corporation (a~~ Common Stock issued or sold without consideration shall be deemed to have been issued or sold for $.01 per share. "~~Spin-Off") made~~ Additional Stock" shall mean Common Stock or options, warrants or other rights to ~~holders of~~ acquire, or securities convertible into or exchangeable for, shares of Common Stock, including shares held in the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off Corporation's treasury, and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at issued upon the exercise of any ~~time outstanding shall not include any~~ options, rights or warrants to subscribe for shares of Common Stock ~~then owned~~ and shares of Common Stock issued upon the direct or ~~held by~~ indirect conversion or exchange of securities for ~~the account~~ shares of ~~the Corporation~~Common Stock, except as provided in subsection (b)(iv) below.

Appears in 1 contract

Sources: Securities Purchase Agreement (Network 1 Security Solutions Inc)

Conversion. The holders of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, at At any time, at the ~~office~~ option of the ~~Corporation~~ Holder, all or any ~~transfer agent for such Series~~portion of the outstanding principal amount of this Note together with accrued and unpaid interest thereon to the date of conversion (the "Conversion Amount"), shall be convertible into ~~one thousand (1,000) fully~~ the number of fully-paid and nonassessable shares of Probex Common Stock ~~subject (x)~~ obtained by dividing the Conversion Amount by the Conversion Price then in effect as adjusted pursuant to ~~adjustment~~ Section 3. The initial Conversion Price shall be $1.40. 2.1. The applicable Conversion Price from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in ~~this paragraph shall be "1",~~ effect is subject to adjustment as provided in ~~paragraph VIII.G.~~Section 3 hereof. B. 2.2. Probex shall not issue fractions of shares of Probex Common Stock upon conversion of this Note or scrip in lieu thereof. If ~~the holders~~ any fraction of a ~~majority~~ share of Probex Common Stock would, except for the provisions of this Section 2.2, be issuable upon conversion of all or any part of this Note, Probex shall in lieu thereof pay to the person entitled thereto an amount in cash equal to the Current Market Value of such fraction, calculated to the nearest one-hundredth (1/100) of a share. 2.3. Whenever the Conversion Price shall be adjusted as provided in Section 3 hereof, Probex shall mail to each Holder, a statement, signed by the chairman of the ~~outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above~~board, the ~~Corporation~~ president, any vice president or treasurer of Probex, showing in reasonable detail the facts requiring such adjustment and the Conversion Price that will be effective after such adjustment. Probex shall ~~notify all other record holders~~ also cause a notice setting forth any such adjustments to be sent by mail, first class, postage prepaid, to the Holder of ~~Series B Preferred Stock (a "Conversion Notice")~~this Note at its address appearing on the stock register. ~~Following receipt~~ If such notice relates to an adjustment resulting from an event referred to in Section 3.7, such notice shall be included as part of ~~a Conversion Notice~~the notice required to be mailed and published under the provisions of Section 3.7 hereof. 2.4. In order to exercise the conversion privilege, the ~~holders~~ Holder of ~~Series B Preferred Stock~~ this Note shall surrender this Note to the ~~certificate or certificates therefor duly endorsed, at the~~ principal office of the ~~Corporation or of any transfer agent for such Series~~Company, and shall give written notice to the Company and Probex that the Holder of this Note elects to convert all or any portion of the Conversion Amount. Such notice shall also state ~~therein~~ the name or names (with address) in which the certificate or certificates for shares of Probex Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which ~~such holder~~ shall be ~~entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business~~ issuable on ~~the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon~~ such conversion shall be ~~treated for all purposes as the recordholder or holders of such~~ issued, subject to any restrictions on transfer relating to shares of ~~Common Stock as of such date. The issuance of certificates or shares of~~ Probex Common Stock upon conversion ~~of shares of Series B Preferred Stock~~ thereof. If so required by the Company or Probex, the Note surrendered for conversion shall be ~~made without charge for any issue~~endorsed or accompanied by written instrument or instruments of transfer, ~~stamp or other similar tax~~ in ~~respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down~~ form satisfactory to the ~~nearest whole share~~Company, ~~and~~ duly authorized in writing. The date of receipt by the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification Company of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing Note and Probex of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.As soon as

Appears in 1 contract

Sources: 7% Senior Secured Convertible Note (Probex Corp)

Conversion. ~~The holders~~ For so long as any amount of principal or accrued interest remains outstanding and payable to the Investor pursuant to the Note, a holder of the Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible at the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock, Note may at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to ~~time~~ time, at its option and discretion, elect to convert all or any portion of the ~~Corporation shall pay~~ unpaid principal of, and all or any ~~dividend or make any other distribution~~ portion of the accrued but unpaid interest on, such Note into shares (the "Note Shares") of the Company's Series A Convertible Preferred Stock, $.01 par value ("Existing Preferred") at a conversion price of $2.00 per share (the "Existing Preferred") (such price being subject to adjustment for stock splits, stock dividends and the like) upon written notice of such election to the ~~holders of its Common Stock or other class of securities, or shall offer for subscription pro rata~~ Company. In the event that the Investor elects to ~~the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification~~ convert a portion of the ~~Common Stock~~ unpaid principal of the ~~Corporation or consolidation or merger of the Corporation with or into another corporation~~Note, or any ~~sale or conveyance~~ accrued interest thereon, as set forth above, the principal amount outstanding under the Note at such time shall automatically be reduced by an amount equal to ~~another corporation of~~ the ~~property of~~ amount so converted." In all other respects, the ~~Corporation as an entirety or substantially as an entirety~~Purchase Agreement is hereby ratified, ~~or there~~ confirmed and approved, and all terms thereof shall remain in full force and effect and shall be ~~a voluntary or involuntary dissolution~~binding upon the parties and their respective heirs, ~~liquidation or winding up of the Corporation, then,~~ successors and assignees. This Amendment may be executed in any ~~one or more~~ number of ~~said cases~~ counterparts and by both parties hereto in separate counterparts, with the ~~Corporation shall give at least 20 days' prior written notice (~~same effect as if both parties had signed the ~~time of mailing of~~ same document. All such ~~notice~~ counterparts shall be deemed to an original, shall be construed together and shall constitute the ~~time~~ same instrument. COMPANY: NEON SYSTEMS, INC. By: /s/ F. ▇▇▇▇▇▇ ▇▇▇▇▇▇ --------------------------------------- Title: President --------------------------------------- INVESTOR: JMI EQUITY FUND, L.P. By: JMI Partners, L.P., Its general partner By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ---------------------------------- ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a general partner AMENDMENT NUMBER THREE TO SECURED CONVERTIBLE PROMISSORY NOTE PURCHASE AGREEMENT AND SECURED CONVERTIBLE PROMISSORY NOTE NEON Systems, Inc. (the "Company") and JMI Equity Fund, L.P. (the "Investor") hereby agree that the Secured Convertible Promissory Note Purchase Agreement (the "Purchase Agreement") by and between the Investor and the Company and the Company's Secured Convertible Promissory Note (the "Note"), each dated as of ~~giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of~~ September 29, 1994, each as ~~shown on~~ amended to date, be and hereby are amended such that the ~~books~~ term "Payment Date," as defined therein, shall mean December 31, 1997 in lieu of ~~the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend~~December 31, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid1995. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or In all other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalizationrespects, the ~~Corporation shall at~~ Purchase Agreement and the Note are hereby ratified, confirmed and approved, and all ~~times reserve~~ terms thereof remain in full force and ~~keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such~~ effect. This Amendment may be executed in any number of ~~its shares of Common Stock~~ counterparts and by both parties hereto in separate counterparts, with the same effect as ~~shall from time to time be sufficient to effect~~ if both parties had signed the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to same document. All such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock counterparts shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlieran original, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made construed together and shall ~~be effective retroactively immediately after~~ constitute the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversionsame instrument. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Secured Convertible Promissory Note Purchase Agreement (Neon Systems Inc)

Conversion. ~~The holders of~~ (a) Prior to the ~~Series B Preferred Stock~~ Stated Maturity Date, the Holder shall have ~~conversion rights as follows: A. Each share of Series B Preferred Stock shall be convertible~~ the right, at ~~the direction of, and by notice to the Corporation from, the holders of a majority of the outstanding shares of Series B Preferred Stock,~~ its option at any time, ~~at the office~~ to convert some or all of the ~~Corporation or any transfer agent for~~ Note into such ~~Series, into one thousand (1,000)~~ number of fully paid and nonassessable shares of Common Stock ~~subject~~ as is obtained by: dividing the principal amount of this Note to be converted by the Conversion Price then in effect. The rights of conversion set forth in this Section 4 shall be exercised by the Holder by giving written notice to the Company that the Holder elects to convert a stated amount of this Note into Common Stock and by surrender of this Note (xor, in lieu thereof, by delivery of an appropriate lost security affidavit in the event this Note shall have been lost or destroyed) to ~~adjustment from time to time~~ the Company at its principal office (or such other office or agency of the Company as ~~provided below (as so adjusted,~~ the ~~"conversion ratio") and (y) (prior~~ Company may designate by notice in writing to the ~~consummation of~~ Holder) at any time on the ~~Recapitalization) to limitations resulting from~~ date set forth in such notice (which date shall not be earlier than the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation of the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following Company's receipt of such notice), together with a ~~Conversion Notice, the holders~~ statement of ~~Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein~~ the name or names (with address) in which the certificate or certificates for shares of Common Stock ~~are to~~ shall be issued. ~~The Corporation~~ Upon any conversion of this Note, the Company shall, ~~as soon as practicable~~ at its option, pay any accrued or unpaid interest on the portion of this Note so converted in cash or in Interest Shares, with each Interest Share having a value equal to the Market Price on the conversion date. (b) Promptly after receipt of the written notice referred to in Section 4(a) above and surrender of this Note (or, in lieu thereof, by delivery of an appropriate lost security affidavit in the event this Note shall have been lost or destroyed), but in no event more than three (3) Business Days thereafter, the Company shall issue and ~~deliver at such office to such holder~~deliver, or cause to be issued and delivered, to the ~~nominee~~ Holder, registered in such name or ~~nominees of such holder~~names as the Holder may direct in writing, a certificate or certificates for the number of whole shares of Common Stock ~~to which~~ issuable upon the conversion of such ~~holder shall be entitled as aforesaid~~portion of this Note. ~~Such~~ To the extent permitted by law, such conversion shall be deemed to have been ~~made immediately prior to~~ effected, as of the close of business on the date on which such written notice shall have been received by the Company and this Note shall have been surrendered as aforesaid (or, in lieu thereof, an appropriate lost security affidavit has been delivered to the Company), and at such time, the rights of ~~such Conversion Notice~~ the Holder shall cease with respect to the principal amount of the Notes being converted, and the ~~person~~ Person or ~~persons entitled to receive the~~ Persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be ~~treated for all purposes as~~ deemed to have become the ~~recordholder~~ holder or holders of ~~such~~ record of the shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuancerepresented thereby. C. (c) No fractional shares shall be issued upon any conversion of this Note into Common Stock. If any ~~shares of Series B Preferred Stock and the number of shares~~ fractional share of Common Stock would, except for the provisions of the first sentence of this Section 4(c), be delivered upon such conversion, the Company, in lieu of delivering such fractional share, shall pay to the Holder an amount in cash equal to the Market Price of such fractional share of Common Stock. In case the principal amount of this Note exceeds the principal amount being converted, the Company shall, upon such conversion, execute and deliver to the Holder, at the expense of the Company, a new Note for the principal amount of this Note surrendered which is not to be ~~issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share~~converted. ~~D. In case~~ (d) If the Company shall, at any time or from time to time ~~the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities~~while this Note is outstanding, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a ~~distribution,~~ distribution on ~~the outstanding shares of~~ its Common Stock in shares of Common Stock, ~~(B)~~ subdivide ~~the~~ its outstanding shares of Common Stock into a ~~larger~~ greater number of shares ~~of Common Stock, (C)~~ or combine ~~the~~ its outstanding shares of Common Stock into a smaller number of shares or ~~(D)~~ issue by reclassification of ~~the~~ its outstanding shares of Common Stock any shares of its capital stock of (including any such reclassification in connection with a consolidation or merger in which the ~~Corporation~~Company is the continuing corporation), ~~then, and in each such case,~~ then (i) the ~~conversion ratio~~ Conversion Price in effect immediately prior to the date on which such ~~event or the record date therefor, whichever is earlier,~~ change shall become effective shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying ~~(A) the applicable conversion ratio on the day immediately prior to~~ such ~~date~~ Conversion Price by ~~(B)~~ a fraction, the numerator of which shall be the ~~sum~~ number of ~~(1)~~ shares of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common Stock outstanding on immediately after giving effect to such change and (ii) the number of Conversion Shares issuable upon conversion of this Note shall be adjusted by multiplying the number of Conversion Shares issuable upon conversion of this Note immediately prior to the date on which such ~~shares or Convertible Securities are issued and (2)~~ change shall become effective by a fraction, the ~~number~~ numerator of ~~additional shares of Common Stock issued, or into~~ which is shall be the ~~Convertible Securities may convert,~~ Conversion Price in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively in effect immediately after ~~the close of business on~~ giving effect to such ~~date. For purposes of this clause (ii)~~change, ~~the aggregate consideration receivable by the Corporation~~ calculated in ~~connection~~ accordance with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) above. Such adjustments shall be made successively whenever any event listed above shall occur. (e) If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company's assets to another Person shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Conversion Shares immediately theretofore issuable upon conversion of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were Note such shares of ~~Common Stock (if any) actually issued~~ stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Conversion Shares equal to the number of Conversion Shares immediately theretofore issuable upon ~~exercise or~~ conversion of this Note, had such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declarereorganization, ~~order~~reclassification, ~~pay or make a dividend~~ consolidation, merger, sale, transfer or other ~~distribution~~ disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Conversion Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any ~~distribution~~ shares of ~~stock~~ stock, securities or assets thereafter deliverable upon the conversion hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Holder, at the last address of the Holder appearing on the books of the Company, such shares of stock, securities or ~~property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off)~~assets as, on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with ~~generally accepted accounting principles~~the foregoing provisions, ~~during~~ the ~~period (treated as one accounting period) commencing on July 1~~Holder may be entitled to purchase, ~~1998~~without regard to any conversion limitation specified in Section 4, and ~~ending on~~ the other obligations under this Note. The provisions of this paragraph (e) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions. (f) In case the Company shall fix a payment date ~~such dividend is paid or (B) dividends or distributions~~ for the making of ~~shares~~ a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which ~~are referred to in clause (i~~the Company is the continuing corporation) of ~~this paragraph G~~evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus), ~~then, and in each such case~~or subscription rights or warrants, the ~~conversion ratio~~ Conversion Price to be in effect after such payment date shall be ~~adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock~~ determined by multiplying ~~(1)~~ the ~~applicable conversion ratio on the day~~ Conversion Price in effect immediately prior to ~~the record~~ such payment date ~~fixed for the determination of stockholders entitled to receive such dividend or distribution~~ by ~~(2)~~ a fraction, the numerator of which shall be the ~~then Current Market Price per share~~ total number of shares of Common Stock ~~for~~ outstanding multiplied by the ~~period~~ Market Price of ~~20 Trading Days preceding~~ Common Stock immediately prior to such ~~record~~ payment date, less the fair market value (as determined by the Board in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which shall be ~~such Current Market Price per share~~ the total number of shares of Common Stock ~~for the period of 20 Trading Days preceding~~ outstanding multiplied by such ~~record~~ Market Price immediately prior to such payment date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which . Such adjustment shall be ~~mailed~~ made successively whenever such a payment date is fixed. (g) An adjustment to the Conversion Price shall become effective immediately after the payment date in the case of each ~~holder of shares of Series B Preferred Stock) of such~~ dividend or ~~distribution; provided, however, that in~~ distribution and immediately after the effective date of each other event which requires an adjustment. (h) In the event that, as a result of ~~a distribution of~~ an adjustment made pursuant to this Section 4, the Holder shall become entitled to receive any shares of capital stock of ~~a Subsidiary of~~ the ~~Corporation (a "Spin-Off") made to holders of~~ Company other than shares of Common Stock, the ~~numerator~~ number of such ~~fraction~~ other shares so receivable upon conversion of this Note shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the ~~sum~~ provisions contained in this Note. (i) Except as provided in Section 4(j) hereof, if and whenever the Company shall issue or sell, or is, in accordance with any of ~~the Current Market Price per share~~ Sections 4(i)(i) through 4(i)(vii) hereof, deemed to have issued or sold, any Additional Shares of Common Stock (as defined below) for no consideration or for a consideration per share less than the ~~period of 20 Trading Days preceding~~ Conversion Price in effect immediately prior to the ~~35th Trading Day after the effective date~~ time of such ~~Spin~~issuance or sale, then and in each such case (a "Trigger Issuance") the then-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which existing Conversion Price, shall be ~~the current market price per share~~ reduced, as of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of ~~such Spin-Off.~~ the Trigger Issuance, to a price determined as follows: Adjusted Conversion Price = (ivA x B) ~~For purposes of this paragraph G,~~ + D ----------- A+C where "A" equals the number of shares of Common Stock ~~at any time outstanding shall not include any shares~~ outstanding, including Additional Shares of Common Stock ~~then owned or held by or for the account of the Corporation.~~(as defined below) deemed to be issued hereunder, immediately preceding such Trigger Issuance;

Appears in 1 contract

Sources: Purchase Agreement (LOCAL.COM)

Conversion. Any shares of Series B Stock may, at the option of the holder, be converted at any time after the Conversion Time into such number of fully paid and non-assessable shares of common stock equal to two thirds of the number of Paivis, Corp. (“Paivis”) common shares that the holder exchanged for their Series B Shares in the merger transaction between the Corporation and Paivis under the Agreement and Plan of Merger dated December ___, 2007 (Merger Agreement). The ~~holders~~ holder may convert their Series B Stock in common shares only after the earliest of the following events: a) eighteen (18) months following the issuance of the Series B ~~Preferred~~ Stock ~~shall have conversion rights as follows: A. Each share of~~ or b) six (6) months after the Corporation’s common stock and Series B ~~Preferred~~ Stock ~~shall be convertible at~~ has commenced trading after successful listing on a exchange such as the ~~direction of, and by notice to~~ American Stock Exchange or quotation system such as the NASDAQ Small Cap or National Market System the (“Conversion Time”). If the Corporation ~~from,~~ fails to file a registration statement as per the ~~holders of a majority of~~ Registration Rights section herein or fails to make application to list the ~~outstanding shares of~~ Series B ~~Preferred Stock, at any time, at the office of the Corporation or any transfer agent for such Series, into one thousand (1,000) fully paid and nonassessable shares of Common~~ Stock subject (x) to adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior to the consummation of the Recapitalization) to limitations resulting from the available number of shares of Common Stock which may be reserved for issuance upon such conversion, provided ,that any conversion pursuant to this paragraph A of less than all of the outstanding shares of Series B Preferred Stock shall be on a ~~pro rata basis amongst all holders of Series B Preferred Stock. After consummation of~~ senior exchange or quotation system as per the Recapitalization, the number "1,000" in this paragraph shall be "1", subject to adjustment as provided in paragraph VIII.G. B. If the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock (a "Conversion Notice"). Following receipt of a Conversion Notice, Listing Rights section herein the holders of Series B ~~Preferred~~ Stock shall have the right to convert to common shares of the Corporation immediately upon such failure. If the shares of common stock issuable upon the conversion of shares of Series B Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise, then and in each such event, the holder of each share of Series B Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change by holders of the number of shares of common stock into which such share of Series B Stock might have been converted immediately prior to such reorganization, reclassification or change. Before any holder of shares of Series B Stock shall be entitled to convert the same into shares of common stock, such holder shall surrender the certificate or certificates ~~therefor~~ therefore, duly endorsed, at the principal executive office of the Corporation or of any transfer agent for such ~~Series~~shares, and shall give written notice by mail, postage prepaid, to the Corporation at its principal executive office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of ~~Common Stock~~ common stock are to be ~~issued~~issued in the written Notice of Conversion form of Exhibit B attached hereto. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such ~~holder, or to the nominee or nominees~~ holder of ~~such holder~~shares of Series B Stock, a certificate or certificates for the number of shares of ~~Common Stock~~ common stock to which ~~such~~ each holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such ~~Conversion Notice~~ surrender of the certificate or certificates representing the shares of Series B Stock to be converted, and the person or persons entitled to receive the shares of ~~Common Stock~~ common stock issuable upon such conversion shall be treated for all purposes as the ~~recordholder~~ record holder or holders of such shares of ~~Common Stock~~ common stock as of such date. ~~The issuance~~ In the event some but not all of ~~certificates or~~ the shares of ~~Common~~ Series B Stock ~~upon conversion~~ represented by a certificate or certificates surrendered by a holder are converted, the Corporation shall execute and deliver to the holder or to such other person as the holder may request in writing, at the expense of the Corporation, a new certificate representing the number of shares of Series B ~~Preferred~~ Stock ~~shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C.~~ which were not converted. No fractional shares shall be issued upon conversion of ~~any~~ shares of Series B ~~Preferred~~ Stock. VOTING RIGHTS Each share of Series B Stock ~~and~~ shall be able to vote the equivalent of one (1) shares of common stock. The holders of record of outstanding shares of Series B Stock shall be entitled to cast on any matter to be voted upon by the holders of common stock of the Corporation, that number of votes which the number of shares of ~~Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of~~ common stock into which such outstanding Series B ~~Preferred~~ Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class or any other right, or there shall be any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give at least 20 days' prior written notice (the time of mailing of such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall is then convertible would be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required cast multiplied by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of one (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Merger Agreement (Trustcash Holdings, Inc.)

Conversion. The ~~holders~~ Holder, in its sole discretion, shall be entitled to convert the Debenture into shares of Common Stock, in whole or in part, upon giving to the ~~Series B Preferred Stock shall have conversion rights as follows: A. Each share of Series B Preferred Stock~~ Maker written notice to such conversion. The Debenture, or portion hereof, shall be convertible at into such number of Common Stock (the ~~direction of~~"CONVERSION STOCK") as will be determined by dividing the principal amount of the Debenture, and ~~by notice to the Corporation from, the holders of a majority~~ all or any portion of the ~~outstanding shares~~ accrued interest (at Holder's sole discretion), if any, by the Conversion Price. The Conversion Price shall be the listed closing bid price for maker's common stock as listed on the American Stock Exchange on the trading day immediately before the date of ~~Series B Preferred Stock, at any time, at~~ conversion (the ~~office of the Corporation or any transfer agent for~~ "CONVERSION DATe"). The Maker agrees that such ~~Series, into one thousand (1,000) fully paid and nonassessable~~ shares of Common Stock ~~subject (x)~~ shall be deemed to ~~adjustment from time to time as provided below (as so adjusted, the "conversion ratio") and (y) (prior~~ be issued to the ~~consummation~~ Holder as the record holder of such shares as of the ~~Recapitalization) to limitations resulting from~~ close of business on the ~~available number of~~ Conversion Date. A stock certificate for the shares of Common Stock shall be delivered to the Holder within ten (10) days following the Conversion Date. No adjustments shall be made to the number of shares issuable upon conversion of this Debenture ("DEBENTURE SHARES") for any cash dividends paid or payable to holders of record of Common Stock prior to the date as of which ~~may~~ the Holder shall be ~~reserved~~ deemed to be the record holder of such Debenture Shares. The Company hereby agrees that the Holder shall have "piggyback" registration rights entitling such Holder to include any and all of the Debenture Shares in any future registration of any shares of the Company. The Company shall give Holder at least ten (10) days' prior written notice for ~~issuance upon~~ any proposed registration of the Company's shares in order for such ~~conversion, provided ,that~~ Holder to determine whether any ~~conversion~~ or all of the Debenture Shares shall be included therein. The Company's obligations pursuant to this ~~paragraph A of less than all~~ Section 4 shall terminate on the earlier to occur of: (a) the second anniversary of the ~~outstanding shares~~ date of ~~Series B Preferred Stock shall be on a pro rata basis amongst all holders of Series B Preferred Stock. After consummation~~ issuance of the ~~Recapitalization,~~ Debenture Shares and (b) such time when all Debenture Shares held by the ~~number "1,000" in this paragraph shall~~ Holder may be ~~"1", subject~~ sold pursuant to ~~adjustment as provided in paragraph VIII.G. B. If~~ Rule 144 under the holders of a majority of the outstanding shares of Series B Preferred Stock give notice of conversion under paragraph A above, the Corporation shall notify all other record holders of Series B Preferred Stock Securities Act during any three (a "Conversion Notice"). Following receipt of a Conversion Notice, the holders of Series B Preferred Stock shall surrender the certificate or certificates therefor duly endorsed, at the office of the Corporation or of any transfer agent for such Series, and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued3) month period. The ~~Corporation shall~~Company shall not issue Debenture Shares if such issuance, ~~as soon as practicable thereafter, issue and deliver at such office~~ when added to ~~such holder, or to the nominee or nominees of such holder, a certificate or certificates for~~ the number of shares of Common Stock ~~to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to~~ issued by the ~~close~~ Company upon exercise of ~~business~~ any warrants, would equal or exceed twenty percent (20%) of the total number of Common Stock issued and outstanding on the date of such ~~Conversion Notice and~~ conversion without first obtaining the ~~person or persons entitled~~ approval of is voting shareholders to ~~receive~~ such issuance in accordance with the ~~shares~~ rules of ~~Common~~ the American Stock issuable upon such conversion shall be treated for all purposes as the recordholder or holders of such shares of Common Stock as of such date. The issuance of certificates or shares of Common Stock upon conversion of shares of Series B Preferred Stock shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. C. No fractional shares shall be issued upon conversion of any shares of Series B Preferred Stock and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share, and the holder of Series B Preferred Stock shall be paid in cash for any fractional share. D. In case at any time or from time to time the Corporation shall pay any dividend or make any other distribution to the holders of its Common Stock or other class of securities, or shall offer for subscription pro rata to the holders of its Common Stock or other class of securities any additional shares of stock of any class Exchange or any other ~~right, or there~~ market rules with which the Company shall be ~~any capital reorganization or reclassification of the Common Stock of the Corporation or consolidation or merger of the Corporation with or into another corporation, or any sale or conveyance~~ required to another corporation of the property of the Corporation as an entirety or substantially as an entirety, or there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Corporation, then, in any one or more of said cases the Corporation shall give comply at ~~least 20 days' prior written notice (~~the time of ~~mailing of~~ such notice shall be deemed to be the time of giving thereof) to the registered holders of the Series B Preferred Stock at the addresses of each as shown on the books of the Corporation maintained by the Transfer Agent thereof of the date on which (i) the books of the Corporation shall close or a record shall be taken for such stock dividend, distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, sale or conveyance, dissolution, liquidation or winding up shall take place, as the case may be, provided that in the case of any Transaction to which paragraph H applies the Corporation shall give at least 30 days' prior written notice as aforesaid. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale or conveyance or participate in such dissolution, liquidation or winding up, as the case may be. Failure to give such notice shall not invalidate any action so taken. E. From and after the Recapitalization, the Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series B Preferred Stock, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series B Preferred Stock, then in addition to such other remedies as shall be availableto the holder of Series B Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. F. Any notice required by the provisions of paragraph D to be given the holders of shares of Series B Preferred Stock shall be deemed given if sent by facsimile transmission, by telex, or if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his, her or its address appearing on the books of the Corporation. G. The conversion ratio shall be subject to adjustment from time to time as follows: (i) In case the Corporation shall at any time or from time to time after the Issue Date (A) pay a dividend or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock, (B) subdivide the outstanding shares of Common Stock into a larger number of shares of Common Stock, (C) combine the outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of the shares of Common Stock any shares of capital stock of the Corporation, then, and in each such case, the conversion ratio in effect immediately prior to such event or the record date therefor, whichever is earlier, shall be adjusted so that the holder of any shares of Series B Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation which such holder would have owned or have been entitled to receive after the happening of any of the events described above, had such shares of Series B Preferred Stock been surrendered for conversion immediately prior to the happening of such event or the record date therefor, whichever is earlier. An adjustment made pursuant to this clause (i) shall become effective (x) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, or (y) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) In the case the Corporation shall, after the Issue Date, issue shares of Common Stock at a price per share, or securities convertible into or exchangeable for shares of Common Stock ("Convertible Securities") having a "Conversion Price" (as defined below) less than the Current Market Price (for a period of 15 consecutive trading days prior to such date), then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (A) the applicable conversion ratio on the day immediately prior to such date by (B) a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding on the date on which such shares or Convertible Securities are issued and (2) the number of additional shares of Common Stock issued, or into which the Convertible Securities may convert, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on such date and (y) the number of shares of Common Stock which the aggregate consideration receivable by the Corporation for the total number of shares of Common Stock so issued, or the number of shares of Common Stock which the aggregate of the Conversion Price of such Convertible Securities so issued, would purchase at such Current Market price on such date. An adjustment made pursuant to this clause (ii) shall be made on the next Business Day following the date on which any such issuance is made and shall be effective retroactively immediately after the close of business on such date. For purposes of this clause (ii), the aggregate consideration receivable by the Corporation in connection with the issuance of any securities shall be deemed to be the sum of the aggregate offering price to the public (before deduction of underwriting discounts or commissions and expenses payable to third parties), and the "Conversion Price" of any Convertible Securities is the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities (before deduction of underwriting discounts or commissions and expenses payable to third parties) plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion, exchange or exercise of any such Convertible Securities. Neither (A) the issuance of any shares of Common Stock (whether treasury shares or newly issued shares) pursuant to a dividend or distribution on, or subdivision, combination or reclassification of, the outstanding shares of Common Stock requiring an adjustment in the conversion ratio pursuant to clause (i) of this paragraph G, or pursuant to any employee benefit plan or program of the Corporation or pursuant to any option, warrant, right, or Convertible Security outstanding as of the date hereof (including, but not limited to, the Rights, the Series B Preferred Stock, the Series C Preferred Stock and the Warrants) nor (B) the issuance of shares of Common Stock pursuant thereto shall be deemed to constitute an issuance of Common Stock or Convertible Securities by the Corporation to which this clause (ii) applies. Upon expiration of any Convertible Securities which shall not have been exercised or converted and for which an adjustment shall have been made pursuant to this clause (ii), the Conversion Price computed upon the original issue thereof shall upon expiration be recomputed as if the only additional shares of Common Stock issued were such shares of Common Stock (if any) actually issued upon exercise or conversion of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of such Convertible Securities (whether or not exercised or converted) plus the consideration actually received by the Corporation upon such exercise of conversion. (iii) In case the Corporation shall at any time or from time to time after the Issue Date declare, order, pay or make a dividend or other distribution (including, without limitation, any distribution of stock or other securities or property or rights or warrants to subscribe for securities of the Corporation or any of its Subsidiaries by way of dividend or spin-off), on its Common Stock, other than (A) regular quarterly dividends payable in cash in an aggregate amount not to exceed 15% of net income from continuing operations before extraordinary items of the Corporation, determined in accordance with generally accepted accounting principles, during the period (treated as one accounting period) commencing on July 1, 1998, and ending on the date such dividend is paid or (B) dividends or distributions of shares of Common Stock which are referred to in clause (i) of this paragraph G, then, and in each such case, the conversion ratio shall be adjusted so that the holder of each share of Series B Preferred Stock shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (1) the applicable conversion ratio on the day immediately prior to the record date fixed for the determination of stockholders entitled to receive such dividend or distribution by (2) a fraction, the numerator of which shall be the then Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, and the denominator of which shall be such Current Market Price per share of Common Stock for the period of 20 Trading Days preceding such record date, less the Fair Market Value (as defined in Article IX) per share of Common Stock (as determined in good faith by the Board of Directors of the Corporation, a certified resolution with respect to which shall be mailed to each holder of shares of Series B Preferred Stock) of such dividend or distribution; provided, however, that in the event of a distribution of shares of capital stock of a Subsidiary of the Corporation (a "Spin-Off") made to holders of shares of Common Stock, the numerator of such fraction shall be the sum of the Current Market Price per share of Common Stock for the period of 20 Trading Days preceding the 35th Trading Day after the effective date of such Spin-Off and the Current Market Price of the number of shares (or the fraction of a share) of capital stock of the Subsidiary which is distributed in such Spin-Off in respect of one share of Common Stock for the period of 20 Trading Days preceding such 35th Trading Day and the denominator of which shall be the current market price per share of the Common Stock for the period of 20 Trading Days proceeding such 35th Trading Day. An adjustment made pursuant to this clause (iii) shall be made upon the opening of business on the next Business Day following the date on which any such dividend or distribution is made and shall be effective retroactively immediately after the close of business on the record date fixed for the determination of stockholders entitled to receive such dividend or distribution; provided, however, if the proviso to the preceding sentence applies, then such adjustment shall be made and be effective as of such 35th Trading Day after the effective date of such Spin-Off. (iv) For purposes of this paragraph G, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Corporation.

Appears in 1 contract

Sources: Convertible Note Agreement (Us Dataworks Inc)

Common use of Conversion Clause in Contracts