Adjustments; Exceptions Clause Samples
The "Adjustments; Exceptions" clause defines the circumstances under which the terms of an agreement may be modified or certain obligations may be waived. In practice, this clause outlines specific scenarios where standard provisions do not apply, such as changes in law, unforeseen events, or mutual agreement between parties. By clearly stating when and how adjustments or exceptions can be made, the clause provides flexibility and helps prevent disputes by addressing potential deviations from the original contract terms.
Adjustments; Exceptions. (a) If and whenever on or after the Original Issue Date the Company issues or sells or, in accordance with this Section 5, is deemed to have issued or sold, any shares of its Common Stock for a consideration per share less than the Exercise Price in effect immediately prior to the time of such issuance, then immediately upon such issuance or sale or deemed issuance or sale the Exercise Price shall be reduced to the exercise price determined by dividing (i) the sum of (1) the product derived by multiplying the Exercise Price in effect immediately prior to such issuance or sale by the number of shares of Common Deemed Outstanding immediately prior to such issuance or sale, plus (2) the consideration, if any, received by the Company upon such issuance or sale, by (ii) the number of shares of Common Deemed Outstanding immediately after such issue or sale.
(b) Notwithstanding the foregoing, there shall be no adjustment in the Exercise Price as a result of any issuance or sale (or deemed issuance or sale) of:
(i) shares of Common Stock issued upon conversion of the Preferred Stock;
(ii) shares of Common Stock issued upon the exercise of the Warrants, the Series C Warrants or the Series D Warrants;
(iii) shares of Common Stock issued upon the exercise of Options or other Convertible Securities outstanding as of the First Closing Date;
(iv) securities issued pursuant to a Board-approved (including at least one of the Investor Directors) bona fide acquisition of an entity by merger, purchase of substantially all of the assets or other reorganization;
(v) shares of Common Stock issued to Catalyst pursuant to the Options granted under the Catalyst Letter Agreements;
(vi) shares of Common Stock or other securities issued as a dividend or distribution on, or in connection with a split of or recapitalization of, any of the capital stock of the Company;
(vii) up to an aggregate of Eight Hundred Thousand (800,000) shares (or such greater or lesser number of shares as may be approved by a majority of the Board (including at least one of the Investor Directors)) of Common Stock reserved for issuance per year pursuant to the Option Plan (subject to adjustment in the event of stock splits, stock dividends, stock combinations, recapitalizations and like occurrences) and shares of Common Stock reserved for issuance pursuant to the Option Plan in lieu of the repayment of certain salary deferrals as approved by a majority of the Board (including at least one of the Investor Direc...