PROCEDURES ON CONVERSION Clause Samples
The "Procedures on Conversion" clause outlines the specific steps and requirements that must be followed when converting one form of security, asset, or contractual interest into another, such as converting preferred shares into common shares. It typically details the notice that must be given, the documentation required, and the timeline for the conversion process. By clearly defining the process, this clause ensures that all parties understand how and when conversions can occur, reducing the risk of disputes and facilitating smooth transitions between different forms of ownership or rights.
PROCEDURES ON CONVERSION. 1. On the Conversion Date, the Directors shall convert the principal amount of the Notes into such number of new fully paid Shares at the Conversion Price, subject to any adjustment as set out in paragraph 10 of Part 2 of this Schedule 3 and in accordance with the following provisions of paragraph 2 to paragraph 9 of Part 2 of this Schedule 3.
2. Conversion of the Notes shall be effected by the Company redeeming the relevant Notes on the Conversion Date. Each Noteholder whose Notes are being converted shall be deemed to irrevocably authorise and instruct the Company to apply the redemption moneys payable to that Noteholder in subscribing for Shares on conversion of the Notes.
3. Shares arising on conversion of the Notes shall be issued and allotted by the Company on the Conversion Date and the certificates for such Shares shall be despatched to the persons entitled to them at their own risk. Each Share arising on conversion shall be issued and allotted at such premium to reflect the difference between the nominal amount of the Share and the Conversion Price.
4. The Shares arising on conversion of the Notes shall be credited as fully paid and rank pari passu with Shares of the same class in issue on the Conversion Date and shall carry the right to receive all dividends and other distributions declared after the Conversion Date.
5. The entitlement of each Noteholder to a fraction of a Share shall be rounded to the nearest whole number of Shares which result from the conversion of the Notes.
6. Provided that on the Conversion Date, the Shares are traded on AIM, the Company will, not later than seven Business Days after the issue of the Shares arising on conversion of the Notes, apply to the London Stock Exchange and/or to such other applicable body for permission to deal in or for quotation of such Shares and shall use all reasonable endeavours to secure such permission or quotation.
7. Provided that on the Conversion Date, the Company is participating in CREST or another electronic or book-entry delivery system in respect of the Shares, the Company will, not later than seven Business Days after the issue of the Shares arising on conversion of the Notes, procure that such Shares be traded on CREST (or such other electronic or book-entry delivery system as applicable).
8. Noteholders shall only be entitled to convert Notes in multiples of £100,000 or, if less, the entire amount of the outstanding Notes held by that Noteholder.
9. The Company undertakes that, w...