Effect of Automatic Conversion Sample Clauses
The "Effect of Automatic Conversion" clause defines what happens when a convertible security, such as a note or preferred share, is automatically converted into another class of securities, typically common stock, upon the occurrence of a specified event. This clause outlines the mechanics of the conversion, including the timing, the conversion ratio, and any adjustments to rights or preferences that may result. For example, it may specify that all outstanding convertible notes will convert into equity at the closing of a qualified financing round. The core function of this clause is to ensure a clear and predictable transition from debt or preferred status to equity, thereby reducing uncertainty for both the company and investors when conversion events occur.
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Effect of Automatic Conversion. On the Automatic Conversion Date, all rights with respect to the Earnout Shares so converted shall terminate, except for the right of the holder thereof to receive the number of Common Shares into which such Earnout Shares have been converted under these Articles. Upon the occurrence of an Automatic Conversion Event, any certificates representing the applicable Earnout Shares shall cease to have or to represent any rights with respect to such Earnout Shares and shall represent only the right of the holder to receive the Common Shares into which they were converted under these Articles. The Company or its agent shall, promptly upon request of any holder whose Earnout Shares have been converted into Common Shares and upon surrender by such holder to the Company of the outstanding certificate(s) formerly representing such Earnout Shares (if any), issue and deliver to such holder, a certificate or certificates or written acknowledgment for the number of Common Shares into which the Earnout Shares were converted at the Automatic Conversion Time (to the extent the Common Shares are certificated). Any conversion under this Part 31 shall be deemed to have been made upon the occurrence of the Automatic Conversion Event and the Person or Persons who at the time of the Automatic Conversion Event were the record holder or holders of the Earnout Shares shall be treated for all purposes as the record holder or holders of the Common Shares into which they were converted as of such time.
Effect of Automatic Conversion. Upon the Automatic Conversion of this Note, the Corporation shall not be obligated to issue certificates evidencing the Common Stock unless such Note is either delivered to the Corporation or its transfer agent, or the Holder notifies the Corporation or its transfer agent that such Note has been lost, stolen or destroyed and executes an affidavit of loss and an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such Note. The Corporation shall, as soon as practicable after such delivery, or such agreement and indemnification, cause its transfer agent to issue and deliver to such Holder, a certificate or certificates for the securities to which the Holder shall be entitled and with any fractional share resulting from such calculation rounded up to the nearest whole share. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of closing of the transaction causing the Automatic Conversion. The person or persons entitled to receive securities issuable upon such Automatic Conversion shall be treated for all purposes as the record holder or holders of such securities on such date.
Effect of Automatic Conversion. To the extent permitted by law, conversion shall be deemed to have been effected as of the date on which conversion was first permitted or required under Section 2.02(c) of the Articles of Incorporation (such date being the "Conversion Time"). The person entitled to receive shares issuable upon such conversion shall be treated for all purposes as the record holder of such class of shares at and as of the Conversion Time, and the right of such person as a holder of the shares held prior to such conversion shall cease and terminate at and as of the Conversion Time, in each case notwithstanding any failure by the holder to deliver to the corporation the Notice or the certificates representing the shares subject to conversion, or the corporation's failure to issue to the holder certificates representing the shares to be held after the conversion has been effected.
Effect of Automatic Conversion. All shares of Class B Common Stock which shall have been automatically converted as herein provided shall no longer be deemed to be outstanding, and all rights with respect to such shares shall immediately cease and terminate at the Automatic Conversion Time, except only the right of the applicable holder thereof to receive shares of Class A Common Stock in exchange therefor and to receive payment of any dividends declared but unpaid thereon. Any shares of Class B Common Stock so automatically converted shall be retired and cancelled and may not be reissued, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Class B Common Stock accordingly.
Effect of Automatic Conversion. On the Automatic Conversion Date, all rights with respect to the Non-Voting Special Shares so converted shall terminate, except for any of the rights of the holder thereof, upon surrender of the holder’s certificate or certificates therefor, to receive certificates (or evidences of book-entry registration) for the number of Common Shares into which such Non-Voting Special Shares have been converted. Upon the automatic conversion of the applicable Non-Voting Special Shares, the holders of such Non-Voting Special Shares shall surrender the certificates representing such shares at the registered office of the Corporation or of its transfer agent. Upon surrender of such certificates, the Corporation shall promptly issue and deliver to such holder, in such holder’s name as shown on such surrendered certificate or certificates, a certificate or certificates (or evidences of book-entry registration) for the number of Common Shares into which the Non-Voting Special Shares surrendered were converted on the Automatic Conversion Date. Such conversion shall be deemed to have been made upon the occurrence of the Automatic Conversion and the Person or Persons entitled to receive the Common Shares issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Shares at such time.