EXEMPT LOAN RULES Clause Samples
The Exempt Loan Rules clause defines the specific conditions under which certain loans are not subject to otherwise applicable regulatory or contractual restrictions. Typically, this clause outlines criteria such as the type of lender, the purpose of the loan, or the amount involved, which, if met, allow the loan to be treated as exempt. For example, loans made by certain financial institutions or for specific business purposes may qualify. The core function of this clause is to provide clarity and flexibility by identifying exceptions to general loan requirements, thereby facilitating transactions that meet designated criteria without unnecessary regulatory burden.
EXEMPT LOAN RULES. Notwithstanding anything to the contrary contained ------------------ in this Loan and Security Agreement (the "Agreement") or in the Note, the Borrower shall be obligated to make repayments of the Loan only to the extent that such repayments when added to the repayments theretofore made during the applicable plan year would not exceed an amount which would cause the limitations of Section 415 of the Code to be exceeded for any ESOP participant. Except as set forth in the next succeeding sentence and to the extent permitted by applicable law, including, without limitation, the Exempt Loan Rules, the principal amount of the Loan and any interest thereon shall be payable solely from contributions (other than contributions of employer securities) made to the Trust in accordance with the ESOP, and cash dividends received on the Shares, to enable the Borrower to pay its obligations under the Loan and from earnings attributable to the Shares and the investment of such contributions and dividends. The Lender acknowledges and agrees that it shall have no other recourse against the Borrower for repayment of the Loan and that it shall have no recourse against assets of the ESOP included in the Trust other than pursuant to Sections 3 and 8 hereof.
EXEMPT LOAN RULES. The Loan will be an "exempt loan," as that phrase is defined in Treasury Regulation section 54.4975-7 and Department of Labor Regulation section 2550.408b-3, and the transactions contemplated by the Loan Documents are not nonexempt "prohibited transactions" under section 4975 of the Code and section 406 of ERISA.