Adjustments to the Conversion Factor Sample Clauses
The "Adjustments to the Conversion Factor" clause defines how and when the conversion factor used in a financial or contractual calculation may be modified. This clause typically applies to situations where external events, such as stock splits, mergers, or other corporate actions, affect the underlying value or quantity of assets referenced in the agreement. For example, if a convertible note is tied to a company's share price, and the company undergoes a stock split, the conversion factor would be adjusted to ensure the economic terms remain fair. The core function of this clause is to maintain the intended economic balance of the agreement by ensuring that unforeseen changes do not unfairly benefit or disadvantage either party.
Adjustments to the Conversion Factor. (a) In the event that the General Partner (A) declares or pays a dividend on its outstanding REIT Stock in REIT Stock or makes a distribution to all holders of its outstanding REIT Stock in REIT Stock, (B) subdivides its outstanding REIT Stock, or (C) combines its outstanding REIT Stock into a smaller number of shares of REIT Stock, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of shares of REIT Stock issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number of shares REIT Stock (determined without the above assumption) issued and outstanding on such date; provided, however, that notwithstanding the foregoing, if the General Partner declares or pays a dividend on its outstanding REIT Stock in REIT Stock or makes a distribution to all holders of its outstanding REIT Stock in REIT Stock (including a dividend in which stockholders may elect to receive all or a portion of such dividend in cash (other than pursuant to a dividend reinvestment program)), no adjustment shall be made if, promptly thereafter, with respect to any dividend or distribution with respect to REIT Stock, the Partnership pays a distribution with respect to each Partnership Unit consisting of a number of Partnership Units (or fraction thereof) equal to the product of (i) the quotient obtained by dividing (a) the aggregate number of shares of REIT Stock paid by the General Partner as a dividend to all stockholders, by (b) the aggregate number of shares of REIT Stock outstanding as of the close of business on the record date for such dividend, and (ii) the number of shares of REIT Stock for which such Partnership Unit is then redeemable pursuant to Section 8.6.
(b) Any adjustment to the Conversion Factor shall become effective immediately after the effective date of any of the events described in subsection (a), retroactive to the record date, if any, for such event, provided, however, that if the Partnership receives a Series A Notice of Redemption Request or Series B Notice of Redemption Request after the record date, but prior to the payment date or effective date, of any dividend, distribution, subdivision or combination referred to in subsection (a), the Conversion Factor shall be dete...
Adjustments to the Conversion Factor