Shareholders Agreement Dilution Clause

In India, the two most frequently used forms are dilution protection: (a) Full Ratchet and b) Broad Based Weighted Average. If a shareholder does not subtract all or part of his or her share of shares in cash on the date indicated, the other shareholders may acquire those remaining shares. If a cash call leads to the acquisition of new shares by a shareholder, directly or via a loan convertible into shares, the net result is the dilution of the participation of shareholders who did not participate in the cash call. While a SHA and a statute should not contradict each other, a SHA may contain a priority clause to ensure that the SHA suspends the articles (in case of inconsistency, shareholders can amend the articles accordingly). . . .

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