The Optional Shares Clause Samples
The Optional Shares clause defines the terms under which additional shares may be issued or purchased at the discretion of a party, typically the investor or the company. In practice, this clause outlines the conditions, timing, and pricing mechanisms for exercising the option to acquire these shares, such as during future financing rounds or upon meeting certain milestones. Its core function is to provide flexibility for future investment or ownership adjustments, thereby accommodating changing capital needs or incentivizing performance.
The Optional Shares. In addition, in the event and to the extent that the Underwriters shall exercise the option to purchase Optional Shares as provided below, the Selling Stockholders agree, severally and not jointly, to sell to each of the Underwriters, and each of the Underwriters, severally and not jointly, to purchase from the Selling Stockholders at the Purchase Price, that portion of the number of Optional Shares as to which such option shall have been exercised (to be adjusted by the Representatives so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction, the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to purchase hereunder. The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering overallotments made in connection with the offering and distribution of the Firm Shares upon notice by the Representatives to the Company and the Selling Stockholders setting forth the number of Optional Shares as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Optional Shares. Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Representatives, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time. If the option is exercised as to all or any portion of the Optional Shares, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Optional Shares then being purchased which the number of Firm Shares set forth in Schedule I opposite the name of such Underwriter bears to the total number of Firm Shares, subject, in each case, to such adjustments as the Representatives in their sole discretion shall make to eliminate any sales or purchases of fractional shares. The Company and the Selling Stockholders understand that the Underwriters intend to make a public offering of the Shares as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Shares on the terms set forth in the Prospectus. The Compan...
The Optional Shares. In addition, on the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants to the several Underwriters the right to purchase, severally and not jointly, up to an aggregate of Optional Shares, at the purchase price per share set forth in Section 3(a). The option granted hereunder is for use by the Underwriters solely in covering any over-allotments in connection with the sale and distribution of the Firm Shares. Any such election to purchase Optional Shares may be exercised only by written notice from the Representative to the Company, given within a period not later than ( ) days after the date of this Agreement, which notice shall specify the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by the Representative but in no event earlier than the First Time of Delivery (as defined in Section 5 hereof) nor later than five (5) Business Days (as defined in Section 5) after the date of such notice. If any Optional Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase, and the Company agrees to sell to such Underwriter, the number of Optional Shares (subject to adjustment to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of Optional Shares to be purchased as the number of Firm Shares set forth on Schedule I opposite the name of such Underwriter bears to the total number of Firm Shares. The Representative may cancel the option at any time prior to its exercise and expiration by giving written notice of such cancellation to the Company.
The Optional Shares. In addition, on the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants to the several Underwriters the right to purchase, severally and not jointly, up to an aggregate of 450,000 Optional Shares, at the purchase price per share set forth in Section 3(a). Any such election to purchase Optional Shares may be exercised only by written notice from the Representative to the Company at any time in whole, or from time to time in part, given within a period not later than thirty (30) days after the date of this Agreement, which notice shall specify the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by the Representative but in no event earlier than the First Time of Delivery (as defined in Section 5 hereof) nor later than five (5) Business Days (as defined in Section 5) after the date of such notice. If any Optional Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase, and the Company agrees to sell to such Underwriter, the number of Optional Shares (subject to adjustment to eliminate fractional shares as the Representative may determine) that bears the same proportion to the total number of Optional Shares to be purchased as the number of Firm Shares set forth on Schedule I opposite the name of such Underwriter bears to the total number of Firm Shares. The Representative may cancel the option at any time prior to its exercise and expiration by giving written notice of such cancellation to the Company.