                                 CODE OF VIRGINIA

EFFECT OF CONVERSION (§ 13.1-722.13)

A. When a conversion becomes effective:

   1. All property owned by, and every contract right possessed by, the
   converting entity remains the property and contract rights of the converted
   entity without reversion or impairment;

   2. All debts, obligations, and other liabilities of the converting entity
   remain the debts, obligations, and other liabilities of the converted entity;

   3. The name of the converted entity may, but need not, be substituted for the
   name of the converting entity in any pending action or proceeding;

   4. If the converted entity is a filing entity or a domestic corporation or a
   domestic or foreign nonstock corporation, its public organic record and its
   private organic rules become effective;

   5. If the converted entity is not a filing entity, its private organic rules
   become effective;

   6. If the converted entity is a registered limited liability partnership, the
   filing required to become a registered limited liability partnership and its
   private organic rules become effective;

   7. The shares or eligible interests of the converting entity are reclassified
   into shares, eligible interests, or other securities, obligations, rights to
   acquire shares, eligible interests or other securities, cash, or other
   property in accordance with the terms of the conversion, and the shareholders
   or interest holders of the converting entity are entitled only to the rights
   provided to them by those terms and to any appraisal rights they may have
   under the organic law of the converting entity;

   8. The converted entity is:
   				a. Incorporated or organized under and subject to the organic law of the
   converted entity;
   				b. The same entity without interruption as the converting entity; and
   				c. Deemed to have been incorporated or otherwise organized on the date
   that the converting entity was originally incorporated or organized.

B. When a conversion of a domestic corporation to a foreign eligible entity
becomes effective, the converted entity is deemed to:

   1. Appoint the clerk of the Commission as an agent for service of process in
   any proceeding to (i) enforce the rights of shareholders who exercise
   appraisal rights in connection with the conversion or (ii) based on a cause of
   action against a nonsurviving domestic corporation arising during the time it
   was in existence under the laws of the Commonwealth, which service of process
   shall be made on the clerk in accordance with &#xA7; 12.1-19.1; and

   2. Agree that it will promptly pay the amount, if any, to which such
   shareholders are entitled under Article 15 (&#xA7; 13.1-729 et seq.).

C. If the converting entity is a foreign eligible entity that is authorized or
registered to transact business in the Commonwealth, its certificate of
authority or registration shall be deemed withdrawn on the effective date of its
conversion.

D. Except as otherwise provided in the articles of incorporation of a domestic
corporation or the organic law or organic rules of a foreign corporation or a
domestic or a foreign eligible entity, a shareholder or eligible interest holder
who becomes subject to interest holder liability in respect of a domestic
corporation or eligible entity as a result of the conversion shall have such
interest holder liability only in respect of interest holder liabilities that
arise after the conversion becomes effective.

E. Except as otherwise provided in the organic law or the organic rules of the
eligible entity, the interest holder liability of an interest holder in a
converting eligible entity that converts to a domestic corporation who had
interest holder liability in respect of such converting eligible entity before
the conversion becomes effective shall be as follows:

   1. The conversion does not discharge that prior interest holder liability with
   respect to any interest holder liabilities that arose before the conversion
   became effective.

   2. The provisions of the organic law of the eligible entity shall continue to
   apply to the collection or discharge of any interest holder liabilities
   preserved by subdivision 1, as if the conversion had not occurred.

   3. The eligible interest holder shall have such rights of contribution from
   other persons as are provided by the organic law of the eligible entity with
   respect to any interest holder liabilities preserved by subdivision 1, as if
   the conversion had not occurred.

   4. The eligible interest holder shall not, by reason of such prior interest
   holder liability, have interest holder liability with respect to any interest
   holder liabilities that arise after the conversion becomes effective.

F. A conversion does not require the converting entity to wind up its affairs
and does not constitute or cause the dissolution, termination, or cancellation
of the entity.

G. Property held for charitable purposes under the laws of the Commonwealth by a
corporation or a domestic or foreign eligible entity immediately before a
conversion shall not, as a result of the transaction, be diverted from the
objects for which it was donated, granted, devised, or otherwise transferred
except and to the extent permitted by or pursuant to the laws of the
Commonwealth addressing cy pres or dealing with nondiversion of charitable
assets.

H. A bequest, devise, gift, grant, or promise contained in a will or other
instrument of donation, subscription, or conveyance which is made to the
converting entity and which takes effect or remains payable after the conversion
inures to the converted entity.

I. A trust obligation that would govern property if transferred to the
converting entity applies to property that is transferred to the converted
entity after the conversion takes effect.

HISTORY: 2001, c. 545; 2002, c. 1; 2005, c. 765; 2015, c. 623; 2016, c. 288;
2019, c. 734; 2020, c. 1226.