Decrease in WFD Stock Price Clause Samples
The 'Decrease in WFD Stock Price' clause defines the contractual consequences if the stock price of WFD falls below a specified threshold during a particular period relevant to the agreement. Typically, this clause outlines actions such as price adjustments, renegotiation rights, or even termination options for one or both parties if the stock price drops significantly. Its core function is to protect parties from unexpected financial risk due to market volatility, ensuring that the terms of the deal remain fair and reflective of current market conditions.
Decrease in WFD Stock Price. By CBNK, if the CBNK Board so determines by a vote of the majority of the members of the entire CBNK Board, at any time during the five-day period commencing with the Determination Date (as defined below), if both of the following conditions are satisfied:
(A) The quotient obtained by dividing the Average Closing Price by the Starting Price (as defined below) (the “WFD Ratio”) shall be less than 0.80; and
(B) (x) the WFD Ratio shall be less than (y) the quotient obtained by dividing the Final Index Price by the Index Price on the Starting Date (each as defined below) and subtracting 0.20 from the quotient in this clause (B)(y) (such number in this clause (B)(y) that results from dividing the Final Index Price by the Index Price on the Starting Date being referred to herein as the “Index Ratio”); subject, however, to the following three sentences. If CBNK elects to exercise its termination right pursuant to this Section 7.01(i), it shall give written notice to WFD. During the five-day period commencing with its receipt of such notice, WFD shall have the option to increase the consideration to be received by the holders of CBNK Common Stock hereunder, by adjusting the Exchange Ratio (calculated to the nearest one one-thousandth) to equal the lesser of (x) a number (rounded to the nearest one one-thousandth) obtained by dividing (A) the product of the Starting Price, 0.80 and the Exchange Ratio (as then in effect) by (B) the Average Closing Price and (y) a number (rounded to the nearest one one-thousandth) obtained by dividing (A) the product of the Index Ratio and the Exchange Ratio (as then in effect) by (B) the WFD Ratio. If WFD so elects within such five-day period, it shall give prompt written notice to CBNK of such election and the revised Exchange Ratio, whereupon no termination shall have occurred pursuant to this Section 7.01(i) and this Agreement shall remain in effect in accordance with its terms (except as the Exchange Ratio shall have been so modified.) For purposes of this Section 7.01(i) the following terms shall have the meanings indicated: