Convertible Debenture Clause Samples
A Convertible Debenture clause defines the terms under which a debt instrument issued by a company can be converted into equity shares at a later date. Typically, this clause outlines the conversion ratio, timing, and any conditions that must be met for conversion, such as reaching a certain maturity date or triggering events like additional financing rounds. By specifying these terms, the clause provides investors with the potential upside of equity participation while initially offering the security of debt, thus balancing risk and reward for both the company and its investors.
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Convertible Debenture be the lesser of the Conversion Price on the Conversion Date and the Conversion Price on the date of such Holder demand. Any such shares will be subject to the provision of this Section.
Convertible Debenture. Upon the execution of this Agreement and payment in cash of the amount shown as the Subscription Amount, the Purchaser shall receive from the Company a Debenture, substantially in the form attached hereto as EXHIBIT A. The form of the Debenture will include: -3- US Dataworks, Inc. Convertible Debenture and Warrants Agreement October 2, 2003
(a) the Debenture shall bear one percent (1%) interest per ANNUM ("INTEREST");
(b) the Company shall convert all of the outstanding principal balance and all of any portion of accrued but unpaid Interest of the Debenture into Debenture Shares at the Per Share Price effective on the Conversion Date. The Debenture shall not be otherwise convertible prior to the Conversion Date.
(i) In the event that the average closing price for the Common Stock for the Price Reset Period is less than Two Dollars ($2.00), the Per Share Price shall be adjusted to equal the average closing price for the Common Stock for the thirty (30) Trading Days immediately preceding December 1, 2003, discounted by twenty-five percent (25%); provided, however, that under no circumstance will the Per Share Price be less than Sixty Cents ($0.60).
(ii) Should the Per Share Price be adjusted as a result of the condition described in subsection (i) above, the Company shall issue to Purchaser, within three (3) Trading Days, the additional shares of Common Stock necessary to give Purchaser that amount equal to the Subscription Amount divided by the (adjusted) Per Share Price less the number of shares previously issued hereunder;
(c) on the Demand Date, Purchaser may demand all of the outstanding principal balance and any accrued and unpaid Interest (if any) be due and payable; and
(d) the Company may not redeem the Debenture except with the written consent of Purchaser.
Convertible Debenture. EXHIBIT A
Convertible Debenture same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise);
Convertible Debenture. The borrowings under this Agreement shall be evidenced by a Convertible Debenture, in the form attached as Exhibit A, hereto.
Convertible Debenture. This Debenture shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of laws thereof. The Company and the Holder hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such suit, action or proceeding is improper. Each of the Company and the Holder hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for notices to it under this instrument and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
Convertible Debenture. Debentures and interest due thereunder on the Automatic Conversion Date into shares of Common Stock pursuant to the terms hereof. Failure to timely provide such written notice shall be deemed a relinquishment of the Company's rights pursuant to this Section.
Convertible Debenture the Company shall be a party to any Change of Control Transaction (as defined in Section 6), shall agree to sell or dispose all or in excess of 33% of its assets in one or more transactions (whether or not such sale would constitute a Change of Control Transaction), or shall redeem or repurchase more than a de minimis number of shares of Common Stock or other equity securities of the Company (other than redemptions of Underlying Shares (as defined in Section 6));
Convertible Debenture receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
Convertible Debenture converting Holder in an amount equal to the Mandatory Prepayment Amount for the Excess Principal as liquidated damages and not as penalty. If the converting Holder shall have elected the first option pursuant to the immediately preceding sentence and the Company shall have failed to obtain the Shareholder Approval on or prior to the 60th day after such request, then within three days of such 60th day, the Company shall pay cash to the converting Holder an amount equal to the Mandatory Prepayment Amount for the Excess Principal as liquidated damages and not as penalty. If the Company fails to pay the Excess Principal in full pursuant to this Section within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum or such lesser maximum amount that is permitted to be paid by applicable law, to the converting Holder, accruing daily from the Conversion Date until such amount, plus all such interest thereon, is paid in full. The Company and the Holder understand and agree that shares of Common Stock issued to and then held by the Holder as a result of conversions of Debentures shall not be entitled to cast votes on any resolution to obtain Shareholder Approval pursuant hereto.