Contingent convertible financial instruments
First Claim
1. A method performed with respect to an entity, indicia of ownership of the entity trading at a price, the method comprising the steps of:
- issuing a financial instrument indicative of a principal amount and receiving money therefor;
promising, pursuant to the financial instrument, to repay said principal upon predetermined conditions and according to a predetermined term;
promising, pursuant to the financial instrument, to allow a holder of the instrument to convert the instrument into indicia of ownership of the entity at a conversion price upon a contingency, the contingency comprising an event, occurring during the term, of indicia of ownership of the entity reaching a value that is in a predetermined relationship with the conversion price; and
converting the instrument upon the holder'"'"'s request if the contingency is satisfied.
16 Assignments
0 Petitions
Accused Products
Abstract
A contingent convertible debt instrument contains a provision permitting conversion only if any of certain economically substantial contingencies is satisfied. For example there may be a provision that conversion is permitted only if the issuer'"'"'s stock price reaches some price, defined as some predetermined price substantially higher than the conversion price, is reached. This contingent conversion trigger price may be 110% or 120% more of the conversion price. The debt instrument may be a negotiable long-term zero-coupon note, and a provision may be included that the number of underlying instruments issuable or deliverable at conversion or exchange is adjusted under certain circumstances (e.g., merger, acquisition, or formulae amounts). Corresponding methods and systems are employed for offering and servicing such financial instruments.
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Citations
83 Claims
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1. A method performed with respect to an entity, indicia of ownership of the entity trading at a price, the method comprising the steps of:
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issuing a financial instrument indicative of a principal amount and receiving money therefor;
promising, pursuant to the financial instrument, to repay said principal upon predetermined conditions and according to a predetermined term;
promising, pursuant to the financial instrument, to allow a holder of the instrument to convert the instrument into indicia of ownership of the entity at a conversion price upon a contingency, the contingency comprising an event, occurring during the term, of indicia of ownership of the entity reaching a value that is in a predetermined relationship with the conversion price; and
converting the instrument upon the holder'"'"'s request if the contingency is satisfied. - View Dependent Claims (2, 3, 4, 5)
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6. A financial instrument issued by an entity with respect to a borrowed principal amount, indicia of ownership of the entity trading at a price, the instrument comprising:
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a provision obligating the entity to repay the principal according to a predetermined term;
a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency;
a provision defining the contingency as an event, occurring during the term, of indicia of ownership of the entity reaching a value that is in a predetermined relationship with the conversion price. - View Dependent Claims (7, 8, 9, 10)
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11. An offering document offering financial instrument issued by an entity with respect to a borrowed principal amount, indicia of ownership of the entity trading at a price, the instrument comprising:
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a provision obligating the entity to repay the principal according to a predetermined term;
a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency;
a provision defining the contingency as an event, occurring during the term, of indicia of ownership of the entity reaching a value that is in a predetermined relationship with the conversion price. - View Dependent Claims (12, 13, 14)
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15. A method performed with respect to an entity, indicia of ownership of the entity trading at a price, the method comprising the steps of:
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issuing a financial instrument indicative of a principal amount and receiving money therefor;
promising, pursuant to the financial instrument, to repay said principal upon predetermined conditions and according to a predetermined term;
promising, pursuant to the financial instrument, to allow a holder of the instrument to convert the instrument into indicia of ownership of the entity at a conversion price upon a contingency, the contingency being other than the mere passage of time; and
converting the instrument upon the holder'"'"'s request if the contingency is satisfied. - View Dependent Claims (16, 17, 18, 19, 20)
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21. A financial instrument issued by an entity with respect to a borrowed principal amount, indicia of ownership of the entity trading at a price, the instrument comprising:
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a provision obligating the entity to repay the principal according to a predetermined term;
a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency;
a provision defining the contingency as an event, occurring during the term, other than the mere passage of time. - View Dependent Claims (22, 23, 24)
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25. An offering document offering a financial instrument issued by an entity with respect to a borrowed principal amount, indicia of ownership of the entity trading at a price, the instrument comprising:
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a provision obligating the entity to repay the principal according to a predetermined term;
a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency;
a provision defining the contingency as an event, occurring during the term, other than the mere passage of time. - View Dependent Claims (26, 27, 28)
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29. A method performed with respect to an entity, indicia of ownership of the entity trading at a price, the method comprising the steps of:
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issuing a financial instrument and receiving money therefor;
promising, pursuant to the financial instrument, to allow a holder of the instrument to convert the instrument to indicia of ownership of the entity at a conversion price upon a contingency, the contingency comprising an event, occurring during the term, of indicia of ownership of the entity reaching a value that is in a predetermined relationship with the conversion price; and
converting the instrument upon the holder'"'"'s request if the contingency is satisfied. - View Dependent Claims (30, 31)
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32. A financial instrument issued by an entity, indicia of ownership of the entity trading at a price, the instrument comprising:
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a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency;
a provision defining the contingency as an event, occurring during the term, of indicia of ownership of the entity reaching a value that is in a predetermined relationship with the conversion price. - View Dependent Claims (33, 34, 35)
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36. An offering document offering a financial instrument issued by an entity, indicia of ownership of the entity trading at a price, the instrument comprising:
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a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency;
a provision defining the contingency as an event, occurring during the term, of indicia of ownership of the entity reaching a value that is in a predetermined relationship with the conversion price. - View Dependent Claims (37, 38, 39)
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40. A method performed with respect to an entity, indicia of ownership of the entity trading at a price, the method comprising the steps of:
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issuing a financial instrument receiving money therefor;
promising, pursuant to the financial instrument, to allow a holder of the instrument to convert the instrument to indicia of ownership of the entity at an exchange price upon a contingency, the contingency being other than the mere passage of time; and
converting the instrument upon the holder'"'"'s request if the contingency is satisfied. - View Dependent Claims (41, 42)
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43. A financial instrument issued by an entity, indicia of ownership of the entity trading at a price, the instrument comprising:
a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency, the contingency being other than the mere passage of time. - View Dependent Claims (44, 45, 46)
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47. An offering document offering a financial instrument issued by an entity, indicia of ownership of the entity trading at a price, the instrument comprising:
a provision making the instrument convertible into a predetermined number of indicia of ownership of the entity at a predetermined conversion price upon a contingency, the contingency being other than the mere passage of time. - View Dependent Claims (48, 49, 50)
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51. A method performed with respect to a first entity, the method comprising the steps of:
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issuing a financial instrument and receiving money therefor;
promising, pursuant to the financial instrument, to allow a holder of the instrument to exchange the instrument for indicia of ownership of a second entity at an exchange price upon a contingency, the contingency comprising an event, occurring during the term, of indicia of ownership of the second entity reaching a value that is in a predetermined relationship with the exchange price; and
exchanging the instrument upon the holder'"'"'s request if the contingency is satisfied. - View Dependent Claims (52, 53)
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54. A financial instrument issued by a first entity, the instrument comprising:
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a provision making the instrument exchangeable into a predetermined number of indicia of ownership of a second entity at a predetermined exchange price upon a contingency;
a provision defining the contingency as an event, occurring during the term, of indicia of ownership of the second entity reaching a value that is in a predetermined relationship with the exchange price. - View Dependent Claims (55, 56, 57)
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58. An offering document offering a financial instrument issued by a first entity, the instrument comprising:
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a provision making the instrument exchangeable into a predetermined number of indicia of ownership of a second entity at a predetermined exchange price upon a contingency;
a provision defining the contingency as an event, occurring during the term, of indicia of ownership of the second entity reaching a value that is in a predetermined relationship with the exchange price. - View Dependent Claims (59, 60, 61)
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62. A method performed with respect to a first entity, the method comprising the steps of:
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issuing a financial instrument receiving money therefor;
promising, pursuant to the financial instrument, to allow a holder of the instrument to exchange the instrument for indicia of ownership of a second entity at an exchange price upon a contingency, the contingency being other than the mere passage of time; and
exchanging the instrument upon the holder'"'"'s request if the contingency is satisfied. - View Dependent Claims (63, 64)
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65. A financial instrument issued by a first entity, the instrument comprising:
a provision making the instrument exchangeable into a predetermined number of indicia of ownership of a second entity at a predetermined exchange price upon a contingency, the contingency being other than the mere passage of time.
- 66. The financial instrument of claim 66 wherein the contingency further comprises the indicia of ownership of the second entity reaching a value that is at least the exchange price.
- 67. The financial instrument of claim 67 wherein the contingency further comprises the indicia of ownership of the second entity reaching a value that is at least 110% of the exchange price.
- 68. The financial instrument of claim 68 wherein the contingency further comprises the indicia of ownership of the second entity reaching a value that is at least 120% of the exchange price.
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69. An offering document offering a financial instrument issued by a first entity, the instrument comprising:
a provision making the instrument exchangeable into a predetermined number of indicia of ownership of a second entity at a predetermined exchange price upon a contingency the contingency being other than the mere passage of time. - View Dependent Claims (70, 71, 72, 81, 82, 83)
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73. A method performed with respect to an entity, the method comprising the steps of:
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issuing a financial instrument and receiving money therefor;
promising, pursuant to the financial instrument, to allow a holder of the instrument to exchange the instrument for an underlying reference at an exchange price upon a contingency, the contingency being other than the mere passage of time; and
exchanging the instrument upon the holder'"'"'s request if the contingency is satisfied. - View Dependent Claims (74, 75)
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76. A financial instrument issued by a first entity, the instrument comprising:
a provision making the instrument exchangeable into a predetermined number of an underlying reference at a predetermined exchange price upon a contingency, the contingency being other than the mere passage of time.
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80. An offering document offering a financial instrument issued by a first entity, the instrument comprising:
a provision making the instrument exchangeable into a predetermined number of indicia of ownership of a second entity at a predetermined exchange price upon a contingency the contingency being other than the mere passage of time.
Specification