CONVERSION OF SHARES; CLOSING Clause Samples
The 'Conversion of Shares; Closing' clause outlines the process by which certain shares, typically preferred shares, may be converted into common shares, and specifies the procedures and timing for finalizing this conversion at the closing of a transaction. In practice, this clause details the mechanics of conversion, such as the applicable conversion ratio, any required notices, and the effective date of conversion, often coinciding with the closing of a financing round or acquisition. Its core function is to ensure a clear and orderly transition of share classes at a critical transaction point, thereby preventing disputes and ensuring all parties understand their post-closing equity positions.
CONVERSION OF SHARES; CLOSING. (a) Conversion of Sellers' Capital Stock (i) Conversion of Edisto Shares in Merger 1. At the Merger 1 Effective Time, by virtue of Merger 1 and without any action on the part of any holder of any capital stock of Parent or Edisto: (A) each share of Edisto Common Stock shall, subject to Sections 4(c) and 4(d), be converted into the right to receive the following (hereinafter referred to as the "Merger 1 Consideration"), without interest: (x) a fractional interest in a share of Parent Common Stock equal to $5.064 divided by the Weighted Average Trading Price (the "Merger 1 Exchange Ratio"); provided, however, (i) if such Weighted Average Trading Price exceeds $34.96, then the Merger 1 Exchange Ratio shall be equal to $5.064 divided by $34.96 and (ii) if such Weighted Average 11 Trading Price is less than $28.96, then the Merger 1 Exchange Ratio shall be equal to $5.064 divided by $28.96, and (y) $4.886 cash (the "Merger 1 Cash Consideration"); and (B) each share of capital stock of Edisto, if any, owned by Parent or any Subsidiary of Parent or held in treasury by Edisto or any Subsidiary of Edisto immediately prior to the Merger 1 Effective Time shall be canceled and no consideration shall be paid in exchange therefor and shall cease to exist from and after the Merger 1 Effective Time.
CONVERSION OF SHARES; CLOSING