Adjustment to Number of Merger Shares. In the event that, prior to the Effective Time, any stock split, combination, reclassification or stock dividend with respect to Parent Common Stock, any change or conversion of Parent Common Stock into other securities or any other dividend or distribution with respect to the Parent Common Stock should occur or, if a record date with respect to any of the foregoing should occur, appropriate and proportionate adjustments shall be made to the number of Merger Shares issuable pursuant to Section 1.06(a).
Adjustment to Number of Merger Shares. During the period commencing on the date of this Agreement and until completion of the Merger (“Interim Period”), the Parties acknowledge that the number of Merger Shares will be adjusted as follows: a) any new issue of ordinary shares or equity securities convertible into new ordinary shares by K2, will result in K2 adjusting up the absolute number of Merger Shares so that the ratio of 800,000,000 / 244,057,151 (“Merger Ratio”) is maintained; b) any reduction in the number of ordinary shares outstanding in the capital of K2 by way of a capital reduction or consolidation of shares will result in K2 adjusting down the absolute number of Merger Shares so that the Merger Ratio is maintained (for example, a one (1) for ten (10) share consolidation by K2 will result in a reduction in the number of Merger Shares from 800,000,000 to 80,000,000); and c) any fund raising completed directly by MTI during the Interim Period (for example, the MTI Bridge Fund Raising in Section 12 below), will result in K2 adjusting up the absolute number of Merger Shares in an amount of shares calculated by dividing the dollar value of that fund raising denominated in US dollars by three (3.0) Australian cents per share using an exchange rate of USD1.02:AUD1.00.
