Common use of Effectiveness of Conversion Clause in Contracts

Effectiveness of Conversion. If the Corporation shall have obtained the Stockholder Approval, then, effective as of the open of business on the Mandatory Conversion Date, each outstanding share of Series [B] Preferred Stock shall, automatically and without the act of any Holder, be converted into a number of shares of Common Stock equal to the Conversion Rate in effect as of the open of business on the Mandatory Conversion Date; provided, however, that the Corporation will not issue fractional shares of Common Stock upon conversion of the Series [B] Preferred Stock and shall instead deliver a check in an amount equal to the value of such fraction computed on the basis of the VWAP per share of Common Stock on the Trading Day immediately before the Mandatory Conversion Date. All shares of Common Stock issued or delivered upon conversion of the Series [B] Preferred Stock shall be validly issued, fully paid and non-assessable and shall be free of preemptive or similar rights and (except, in the case of Series [B] Preferred Stock pledged pursuant to the Indemnification Security Agreement, as provided in the Indemnification Security Agreement) free of any lien or adverse claim created by the Corporation. If more than one share of Series [B] Preferred Stock is surrendered for conversion at one time by the same Holder, then the number of full shares of Common Stock issuable upon conversion of such shares shall be computed on the basis of the aggregate number of shares of Series [B] Preferred Stock so surrendered.