Maximum Conversion Numbers Clause Samples
The Maximum Conversion Numbers clause sets a cap on the total number of units—such as shares, tokens, or other convertible instruments—that can be converted under an agreement. In practice, this means that even if a party is otherwise eligible to convert more units based on performance or investment, the total conversions cannot exceed the specified maximum. This clause is essential for limiting dilution, managing risk, and providing certainty to all parties about the potential impact of conversions on ownership or control.
Maximum Conversion Numbers. Subject to adjustment pursuant to Section 5.17(b): (i) the total number of shares of Company Common Stock to be converted into the right to receive Cash Consideration for such shares (including any such shares subject to the cash portion of a Combination Election (as defined below)), shall be 40.07% of the number of shares of Company Common Stock outstanding immediately prior to the Effective Time (excluding shares to be cancelled pursuant to Section 1.2(c) and Dissenting Shares) (the "Cash Conversion Number"); (ii) the total number of shares of Company Common Stock to be converted into the right to receive Stock Consideration for such shares (including any such shares subject to the stock portion of a Combination Election) shall be 59.93% of the number of shares of Company Common Stock outstanding immediately prior to the Effective Time (excluding shares to be cancelled pursuant to Section 1.2(c) and Dissenting Shares) (the "Stock Conversion Number"); and (iii) the maximum number of shares of Purchaser Common Stock which may be issued as Stock Consideration will be equal to the Exchange Ratio multiplied by Stock Conversion Number and the maximum amount of cash which will be paid as Cash Consideration will be equal to the Cash Consideration multiplied by Cash Conversion Number.