Dilution Protection Sunset Sample Clauses
A Dilution Protection Sunset clause defines the period during which anti-dilution protections for investors remain in effect. Typically, this clause specifies that after a certain date or event—such as an IPO or a set number of years—investors will no longer be shielded from dilution caused by future issuances of shares at lower prices. For example, if a company issues new shares at a lower price after the sunset date, earlier investors would not receive additional shares or adjustments to maintain their ownership percentage. The core function of this clause is to balance investor protection with the company’s need for flexibility in future fundraising, preventing indefinite anti-dilution rights that could hinder later investment rounds.
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Dilution Protection Sunset. Notwithstanding the foregoing, contemporaneously on the date on which the Board, including the Preferred Directors, each acting reasonably and in good faith, determine that the Dilution Protection Sunset Date has occurred, the rights in this Section 5 shall terminate immediately before the issuance of shares of Common Stock by the Corporation or any Affiliate thereof whose proceeds are used exclusively for the expansion of production at the ▇▇▇▇▇ Project. Notwithstanding anything to the contrary herein, the rights of the holders of Preferred Stock pursuant to this Section 5 shall not terminate on the Dilution Protection Sunset Date, or at any point thereafter, with respect to any shares of capital stock issued by the Corporation pursuant to an Option or Convertible Securities, in each case issued, granted or agreed to prior to the Dilution Protection Sunset Date.