Adjustment of Purchase Price for Other Issuances Clause Samples
The "Adjustment of Purchase Price for Other Issuances" clause defines how the purchase price of securities will be recalculated if the company issues additional shares or similar securities after the initial agreement. Typically, this clause outlines the specific events that trigger a price adjustment, such as new stock issuances at a lower price, and details the formula or method used to adjust the original purchase price accordingly. Its core function is to protect investors from dilution and ensure they receive fair value if the company later offers securities on more favorable terms to others.
Adjustment of Purchase Price for Other Issuances. (a) ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. In case the Company at any time or from time to time after the date hereof shall issue or sell Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 3.5(b)) for a consideration per share less than the Current Market Price but greater than the Purchase Price in effect immediately prior to such issue or sale, then, and in each such case, subject to Section 3.8, the Purchase Price shall be reduced concurrently with such issue or sale, to a price (calculated to the nearest .01 of a cent) determined by multiplying such Purchase Price by a fraction
(x) The numerator of which shall be the sum of (i) the number of shares of Common Stock outstanding immediately prior to such issue or sale and (ii) the number of shares of Common Stock which the aggregate consideration received by the Company for the total number of such Additional Shares of Common Stock so issued or sold would purchase at such Current Market Price, and
(y) The denominator of which shall be the number of shares of Common Stock outstanding immediately after such issue or sale, PROVIDED that, for the purposes of this Section 3.5, (x) immediately after any Additional Shares of Common Stock are deemed to have been issued pursuant to Section 3.5(b), such Additional Shares shall be deemed to be outstanding, and (y) treasury shares shall not be deemed to be outstanding.
Adjustment of Purchase Price for Other Issuances