Share Conversion Rights Clause Samples

Share Conversion Rights. 9.6.1 Each Investor holding the Preferred Shares shall, after the issuance date of such Preferred Shares, convert such Preferred Shares into the corresponding number of fully paid Ordinary Shares in proportion to the corresponding subscription price of the relevant Preferred Shares divided by the conversion price of the Preferred Shares (the “Share Conversion Price”). The subscription price for each preferred share shall be the same as the investment amount paid by the Investors for the investment as set out in Article 9.3. The initial Share Conversion Price shall be equal to the subscription price of the relevant Preferred Shares. For the avoidance of doubt, the initial conversion ratio of Preferred Shares to Ordinary Shares shall be 1:1. 9.6.2 The Investors holding the Preferred Shares hereby agree, notwithstanding any provision in Article 9.6.1, each preferred share shall be automatically converted into ordinary share at the then applicable Share Conversion Price upon completion of the Qualified IPO. For the avoidance of doubt, the Share Conversion Price then applicable is the initial Share Conversion Price under Article 9.6.1, or, if applicable, the Share Conversion Price adjusted under Article 9.6.4. 9.6.3 The Investors holding the Preferred Shares hereby agree, if the Ordinary Shares are further converted into Class A Ordinary Shares and Class B Ordinary Shares (i.e., Ordinary Shares with special voting rights), the Ordinary Shares convertible by the Preferred Shares under this Article shall only include Class A Ordinary Shares. 9.6.4 The Parties agree that the Share Conversion Price under Article 9.6.1 shall be adjusted accordingly under the following circumstances: (1) If the Company conducts a reverse stock split, stock split, stock dividend or other similar transactions with respect to the entire remaining share capital, the Share Conversion Price shall be automatically adjusted in the same proportion so that the adjusted share ratio of each Shareholder shall be the same as that before the completion of the transaction. (2) If the Company increases the issued share capital and the circumstances set forth in Article 9.1 occur, the Share Conversion Price shall be automatically adjusted accordingly so that the adjusted share ratio of the Investors shall be in line with the adjusted share ratio as provided in Article 9.1; (3) In any case, the Share Conversion Price shall not be lower than the par value per share of the Company.