Not Convertible Clause Samples

The "Not Convertible" clause establishes that a particular security, instrument, or agreement cannot be converted into another form of security, such as shares or equity. In practice, this means that holders of the instrument are not granted the right to exchange it for stock or other securities at any time during its term. This clause is commonly used in debt instruments or preferred shares to clarify that conversion rights are not available, thereby preventing dilution of ownership or changes in capital structure. Its core function is to provide certainty and stability regarding the nature of the instrument and to avoid potential disputes over conversion rights.