Debt Conversions Clause Samples
The Debt Conversions clause outlines the terms under which outstanding debt may be converted into another form of security, typically equity in the company. This clause specifies the conditions, timing, and conversion rate at which the debt will be exchanged for shares, often triggered by events such as a new financing round or at the discretion of the lender. Its core practical function is to provide a clear mechanism for transforming debt obligations into ownership interests, which can help companies manage cash flow and align the interests of creditors with those of shareholders.
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Debt Conversions. Schedule 4.16 to this Agreement sets forth the name of each holder (each, a “Conversion Debt Holder”) of debt (each, a “Conversion Debt”) of the Company, including Company Options that are Conversion Debt, who has agreed (each, a “Conversion Debt Exchange Agreement”) to accept shares of Parent Common Stock in full satisfaction of all outstanding principal accrued and unpaid interest and other obligations due under the Conversion Debt held by such Conversion Debt Holder, the principal amount of the Conversion Debt to be exchanged for Parent Common Stock and the number of shares of Parent Common Stock being accepted by the Conversion Debt Holder in satisfaction of the Conversion Debt of the Conversion Debt Holder.
Debt Conversions. A. Within two (2) Business Days after the Effective Date, Medici shall file a Certificate of Amendment of the Certificate of Incorporation of Medici, with the Secretary of State of the State of Delaware, in the form attached hereto as Annex A to this Schedule 4.2, authorizing 4,000,000 additional shares of Common Stock.
B. Prior to the Closing, pursuant to an exchange agreement in a form mutually agreed by the parties, Overstock will exchange all of the outstanding principal amount of debt owed by Medici to Overstock (including, without limitation, the loan contemplated in IV.A above) and accrued interest through the date of such debt conversion agreement for Common Stock.
C. Prior to the Closing, pursuant to an exchange agreement in a form mutually agreed by the parties, Overstock will exchange all of the outstanding principal amount of debt owed by tZERO to Overstock and accrued interest through the date of such debt conversion agreement for tZERO Common Stock.
D. Prior to the Closing, pursuant to an exchange agreement in a form mutually agreed by the parties, Medici will exchange all of the outstanding principal amount of debt owed by tZERO to Medici and accrued interest through the date of such debt conversion agreement for tZERO Common Stock. Medici Ventures, Inc., a Delaware corporation, hereby certifies as follows: