Conversion and Purchase Rights Clause Samples
The "Conversion and Purchase Rights" clause defines the rights of a party, typically an investor or lender, to convert their existing interest—such as debt or preferred shares—into another form of equity, or to purchase additional securities under specified conditions. This clause outlines the circumstances under which conversion can occur, the conversion ratio or price, and any limitations or procedures involved. For example, it may allow a noteholder to convert a loan into company shares at a predetermined rate, or grant the right to buy more shares if certain milestones are met. Its core function is to provide flexibility and potential upside for the rights holder, while also clarifying the terms to prevent disputes and ensure both parties understand the mechanisms for conversion or purchase.
Conversion and Purchase Rights. The Holder of this Debenture shall have the right from and after one year from the date hereof, and within the twelve (12) months thereafter, to convert any portion of this Debenture up to the maximum allowed as in Paragraph 2.1 into fully paid and nonassessable shares of Common Stock of Company. Upon the surrender hereof, accompanied by such H▇▇▇▇▇'s written request for conversion, Company shall pay within 30 days all interest accrued hereon to the date of conversion and issue and deliver to such Holder certificates evidencing such shares of stock as hereinafter set forth. If a portion is converted, Company shall deliver to the Holder a certificate for the proper number of shares of stock for the portion converted and a new Debenture in the form hereof for the balance of the principal amount hereof. Upon transfer of this Debenture, the then unexercised conversion or purchase rights set forth in this Paragraph 2 shall inure to the transferees in proportion to their respective interests in remaining principal, or as Holder shall allocate said conversion or purchase rights.
Conversion and Purchase Rights. (a) At any time and from time to time on or before the Maturity Date, Lender shall have the right and option to convert, in whole or in part (i) upon written notice from Lender to Borrower at least ten (10) days prior to the applicable Interest Payment Date or Commitment Fee Payment Date, as the case may be, the accrued interest (including deferred interest) on the Advances under the Note and the commitment fees referred to in Section 2.06, into shares of common stock of Borrower ("Common Stock"); and (ii) upon written notice from Lender to Borrower on or before the Maturity Date, the outstanding principal amount of any Advances; provided in the case of clause (ii), that if Lender does not give the notice at least sixty (60) days prior to the Maturity Date, then (A) the Maturity Date shall be extended by sixty (60) days, less the number of days prior to the Maturity Date that Lender gives Borrower written notice that Lender will not be converting, and (B) no further interest shall accrue pursuant to this Agreement or the Note for the period beginning on the original Maturity Date (i.e., without giving effect to the foregoing extension) and ending on the new Maturity Date (i.e., as extended). The number of shares of Common Stock into which such interest, fees or principal may be converted shall be equal to the aggregate amount being converted, divided by the Conversion Price (as determined pursuant to this Section 2.07).
(b) On or before the Maturity Date, Lender shall have the right and option to purchase up to an aggregate number of shares of Common Stock equal to: the positive excess, if any, of (i) the aggregate dollar amount of the Commitment at such time (regardless, except as set forth in Section 2.01(f), of whether there are any outstanding Advances) over (ii) the aggregate principal amount theretofore converted or thereafter convertible pursuant to Section 2.07(a) above, divided by the Conversion Price; such purchase to be consummated on a mutually acceptable date within thirty (30) days after the Maturity Date. In connection with such purchase, Lender agrees to deliver to Borrower customary investor representations and warranties including to the effect that Lender is an "accredited investor" as defined under Rule 501 promulgated under the Securities Act of 1933, as amended (the "Securities Act"). The maximum dollar amount that may be converted or purchased pursuant to this Section 2.07 shall be Six Million Dollars ($6,000,000) in the aggregate, s...
Conversion and Purchase Rights