Conversion Procedures and Effect of Conversion Clause Samples

The "Conversion Procedures and Effect of Conversion" clause defines the steps and requirements for converting one type of security or interest into another, such as preferred shares into common shares. It typically outlines the process for initiating a conversion, any necessary notices or documentation, and the timing for when the conversion becomes effective. This clause ensures that all parties understand how conversions are executed and clarifies the resulting rights and obligations, thereby preventing disputes and ensuring a smooth transition during the conversion event.
Conversion Procedures and Effect of Conversion. To convert its Series A Preferred Membership Interests to Common Membership Interests, a holder of Series A Preferred Membership Interests shall (i) deliver written notice to the Company, stating that such holder wishes to convert its Series A Preferred Membership Interests into Common Membership Interests and specifying the number of Series A Preferred Membership Interests to be so converted, (ii) surrender to the Company certificates representing Series A Preferred Membership Interests to be converted at any time during usual business hours at the Company’s principal place of businesses or the offices of the Company’s duly appointed agent and (iii) pay any stock transfer, documentary, stamp or similar taxes required to be paid to effect the conversion. The Company shall promptly notify each Member of its receipt of such notice. Promptly after the receipt of such notice, an officer of the Company will amend Schedule A hereto to reflect the conversion and will deliver a certificate to each Member stating that such conversion has been effected, together with an amended copy of Schedule A hereto. Such conversion, to the extent permitted by applicable law, shall be deemed to have been effected as of the close of business on the date (the “Conversion Date”) on which the requirements of the first sentence of this Section 3.04(b) shall have been met by the holder electing to convert its Series A Preferred Membership Interests. Effective immediately prior to the close of business on the Conversion Date applicable to any Series A Preferred Membership Interests as to which such notice has been given, such Series A Preferred Membership Interests shall cease to be outstanding and such holder shall be deemed to hold the number of Common Membership Interests equal to (x) the number of Series A Preferred Membership Interests immediately prior to the close of business on the Conversion Date that such holder has elected to convert, multiplied by (y) the Conversion Rate in effect on such Conversion Date. Upon the conversion of any Series A Preferred Membership Interests into Common Membership Interests, such Common Membership Interests shall be duly authorized, validly issued and fully paid and nonassessable. Series A Preferred Membership Interests converted in accordance with this Section 3.04 shall be retired promptly after the acquisition by the Company thereof, and the certificates representing any such Series A Preferred Membership Interests surrendered to the Company...
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Conversion Procedures and Effect of Conversion 
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  • Effect of Conversion All shares of Preferred Stock which shall have been surrendered for conversion 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 Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Subsection 5.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted 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 stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.

  • Conversion Procedures (i) In the event of conversion pursuant to Section 6(a), the Company shall deliver as promptly as practicable written notice to each holder specifying: (A) the Stockholder Approval Date; (B) the number of shares of Common Stock to be issued in respect of each share of Series A Preferred Stock that is converted; (C) the place or places where certificates or evidence of book-entry notation for such shares of Series A Preferred Stock are to be surrendered for issuance of certificates or evidence of book-entry notation representing shares of Common Stock; and (D) that dividends on the shares to be converted will cease to accrue on such Stockholder Approval Date. Unless the shares of Common Stock issuable upon 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 mandatory conversion shall be accompanied by instruments of transfer, in form satisfactory to the Company, duly executed by the holder thereof or such holder’s duly authorized attorney and an amount sufficient to pay any transfer or similar tax in accordance with Section 15(f). (ii) The conversion shall be deemed to have been effected at the close of business on the Stockholder Approval Date. At such time: (A) the person in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such mandatory conversion shall be deemed to have become the holder of record of the shares of Common Stock represented thereby at such time; (B) such shares of Series A Preferred Stock so converted shall no longer be deemed to be outstanding, and all rights of a holder with respect to such shares shall immediately terminate except the right to receive the Common Stock and other amounts payable pursuant to this Section 6 and the right to receive any dividend declared but not yet paid pursuant to Section 3. (iii) Holders of shares of Series A Preferred Stock at the close of business on a Dividend Record Date shall be entitled to receive the dividend payable on such shares of Series A Preferred Stock on the corresponding Dividend Payment Date notwithstanding the mandatory conversion thereof following such Dividend Record Date and prior to such Dividend Payment Date. In such event, any such dividend that would otherwise be payable in the form of Series A Preferred Stock shall be payable to such Holder either (i) in cash or (ii) at the Company’s option, in shares of Common Stock converted at the Conversion Price in effect as of the time of such mandatory conversion. (iv) In connection with the mandatory conversion of shares of Series A Preferred Stock, no fractions of shares of Common Stock shall be issued, but in lieu thereof the Company shall pay an amount of cash in respect of such fractional interest equal to such fractional interest multiplied by the Market Value per share of Common Stock on the Stockholder Approval Date.

  • Mechanics of Conversion (1) Before any holder of Preferred Shares shall be entitled to convert the same into Ordinary Shares such holder shall surrender the certificate or certificates therefor at the Office and shall give written notice to the Company of the election to convert the same (or any part thereof) and shall state therein the name or names of any nominee for such holder in which the certificate or certificates for shares of Ordinary Shares are to be issued. The Company shall, as soon as practicable thereafter unless such notice states that conversion is to be effective on any later date or when any conditions specified in the notice have been fulfilled in which case conversion shall take effect on such other date or when such conditions have been fulfilled, issue and deliver at such office to such holder of Preferred Shares, or subject to the transfer restrictions contained in these Articles to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Ordinary Shares 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 surrender of the shares of Preferred Shares to be converted, or on any later date or when any conditions specified in the notice have been fulfilled and the person or persons entitled to receive the Ordinary Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Ordinary Shares as of such date. If the conversion is in connection with a QIPO, the conversion may, at the option of any holder tendering Preferred Shares for conversion, be conditioned upon the closing with the underwriter of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Ordinary Shares issuable upon such conversion of the Preferred Shares shall not be deemed to have converted such Preferred Shares until immediately prior to the closing of such sale of securities. In the event that the certificate(s) representing the Preferred Shares to be converted as aforesaid are not delivered to the Company, then the Company shall not be obligated to issue any certificate(s) representing the Ordinary Shares issued upon such conversion, unless the holder of such Preferred Shares notifies the Company in writing that such certificate(s) have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. (2) A conversion of Preferred Shares pursuant to one of the events described in Article 9(a)(2) shall be deemed to have taken place automatically regardless of whether the certificates representing such shares have been tendered to the Company but from and after such conversion any such certificates not tendered to the Company shall be deemed to evidence solely the Ordinary Shares received upon such conversion and the right to receive a certificate for such Ordinary Shares.