Down Terms Sample Clauses

A "Down Terms" clause defines the conditions under which the terms of an agreement may be modified to become less favorable, typically for one party, in response to certain triggering events. In practice, this clause might apply if a company issues new securities with more favorable terms than those previously granted to existing investors, thereby requiring the original terms to be adjusted downward to match the new, more advantageous terms. The core function of a Down Terms clause is to protect parties—often early investors—from being disadvantaged by subsequent agreements, ensuring fairness and maintaining the value of their original investment.