ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES PURCHASABLE AND OTHER TERMS IN CERTAIN EVENTS Sample Clauses
This clause defines how the purchase price and the number of shares that can be acquired under an agreement are adjusted in response to specific events, such as stock splits, mergers, or dividends. In practice, if the company issues additional shares, consolidates its stock, or undergoes a reorganization, the terms of the agreement are recalculated to ensure the economic value of the rights or options remains consistent for the holder. The core function of this clause is to protect parties from dilution or unintended changes in value due to corporate actions, thereby maintaining fairness and predictability in the transaction.
ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES PURCHASABLE AND OTHER TERMS IN CERTAIN EVENTS. 5.1. The Purchase Price and the resulting number of shares of Common Stock issuable under each Warrant shall be subject to adjustment as follows:
(a) If the Company after the date of this Warrant Certificate but before its exercise:
(1) pays a dividend or any other distribution payable in shares of its Common Stock otherwise than out of earnings or earned surplus;
(2) subdivides its outstanding shares of Common Stocks into a greater number of shares;
(3) combines its outstanding shares of Common Stock into a smaller number of shares;
(4) issues by reclassification of its shares of Common Stock any shares of capital stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value); or
(5) issues rights, options or warrants entitling holders of shares of Common Stock to subscribe for shares of Common Stock at less than the current market price, if any; the Purchase Price in effect immediately prior to such action shall be adjusted so that the Holder of each Warrant may receive the number of shares of Common Stock of the Company to which it would have been entitled upon such action if such holder had so exercised the Warrant immediately prior thereto. An adjustment made pursuant to this Section 5 shall become effective immediately after the record date for the determination of owners of Common Stock entitled thereto in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination, reclassification, or issuance of rights, options or warrants retroactive to the record date, if any, for such event.
(b) No payment or adjustment shall be made by or on behalf of the Company on account of any cash dividends on the Common Stock issued upon any exercise of a Warrant which was declared for payment to the holders of Common Stock of record as of a date prior to the date on which such Warrant is exercised.
(c) Upon each adjustment of the Purchase Price made pursuant to this Section 5, each Warrant shall thereafter (until another such adjustment) evidence the right to purchase that number of shares of Common Stock (calculated to the nearest hundredth) obtained by dividing the initial Purchase Price by the Purchase Price in effect after such adjustment.
(d) The Company’s failure to give the notice required by this Section 5.1 or any defect therein shall not affect the validity of such action listed under this Section 5.1.
(e) For the ...
ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES PURCHASABLE AND OTHER TERMS IN CERTAIN EVENTS. The Exercise Price and the resulting number of shares of Common Stock issuable under each Warrant shall be subject to adjustment as set forth in the Warrants.