This clause establishes that a SAFE will convert to equity if there is a liquidity event eg. the corporation undergoes a change of control (merger/acquisition) or is listed on a public stock exchange. In the former scenario, the SAFE converts based on the acquisition or merger price. This allows the investor to redeem the value of the shares to which they are entitled from the acquiring party if they so desire. Alternatively, they can opt to receive a cash payment equal to the SAFE purchase amount. An example of this clause is: If there is a Liquidity Event before the expiration or termination of the SAFE, the Investor will, at its option, either (I) receive a cash payment equal to the Purchase Amount, or (ii) automatically receive from the Corporation a number of shares equal to the Purchase Amount divided by the Liquidity Price (price determined in the Liquidity Event, less the Discount), if the Investor fails to select the cash option.