Exchange of Class C Units Clause Samples
The Exchange of Class C Units clause establishes the terms under which holders of Class C units in a company or partnership may convert or exchange those units for another class of equity, such as common units or shares. Typically, this clause outlines the conditions, timing, and procedures for initiating an exchange, including any required notices, conversion ratios, or restrictions on eligibility. Its core practical function is to provide flexibility and liquidity to Class C unit holders, while also ensuring the company maintains control over the equity structure and the timing of such exchanges.
Exchange of Class C Units. A Member holding Class C Units shall have the right, but not the obligation, to exchange all or a portion of its Class C Units for shares of Class A Stock; provided, however, that a Member holding Class C Units shall be required to exchange one Operating Subsidiary Class C Unit in each Operating Subsidiary for one share of Class A Stock. The other terms, conditions and restrictions with respect to such an exchange will be contained in an exchange rights agreement among the Member holding Class C Units, PubCo and the Operating Subsidiaries, to be entered into at the time any LTIP Units held by such Member are first converted to Class C Units (the “Class C Exchange Agreement”). The form of the Class C Exchange Agreement governing the exchange of Class C Units hereafter shall be determined by the Managing Member. If, as a result of an exchange pursuant to this Section 14.03(b) and the terms of a Class C Exchange Agreement, PubCo acquires (in any manner) Class C Units, each such Class C Unit acquired by PubCo will automatically convert into one Class A Unit.
Exchange of Class C Units