Prohibited Securities Clause Samples
The Prohibited Securities clause defines which types of securities are not permitted to be included or dealt with under the agreement. Typically, this clause lists specific securities—such as those that are unregistered, restricted, or subject to certain legal or regulatory limitations—that cannot be offered, sold, or transferred. For example, it may prohibit securities from jurisdictions with sanctions or those that fail to meet certain compliance standards. The core function of this clause is to ensure legal and regulatory compliance by preventing the involvement of securities that could expose the parties to legal risks or penalties.
Prohibited Securities. (a) The Controlling Shareholder provides the following acknowledgements, representations and warranties and covenants on behalf of the Controlling Shareholder and on behalf of any corporation of which the Controlling Shareholder is a “specified shareholder” (for the purposes of paragraphs 88(1)(c) and 88(1)(d) of the Tax Act (a “Specified Shareholder”)) (all such Persons and corporations, together with the Controlling Shareholder, being defined herein as the “Shareholder Group”); and in furtherance thereof the Controlling Shareholder hereby:
(i) acknowledges that the Purchaser may be undertaking a tax cost “bump” pursuant to paragraphs 88(1)(c) and 88(1)(d) of the Tax Act and covenants not to knowingly take any action or enter into any transaction (including without limitation those set out below) that would have the effect of reducing or eliminating the tax cost “bump” otherwise available to the Purchaser and/or its affiliates in respect of any property owned directly or indirectly by the Company and/or its Subsidiaries;
(ii) represents and warrants that no member of the Shareholder Group has a current intention to acquire (directly or indirectly) any shares, warrants, debt obligations or other securities of the Purchaser or any of its Subsidiaries or any other property which derives, directly or indirectly, more than 10% of its value from such securities (collectively, the “Prohibited Securities”) with the exception of (A) the Purchaser Shares issued directly to that member of the Shareholder Group pursuant to the Arrangement, (B) any Prohibited Securities acquired pursuant to rights granted under any management compensation plans of the Purchaser or its Subsidiaries which are granted as compensation for services, and (C) any Prohibited Securities that any member of the Shareholder Group may acquire (directly or indirectly) by reason of Prohibited Securities being acquired by an investment fund, index replicating fund or mutual fund over which such member of the Shareholder Group does not have any control;
(iii) covenants that, for a period of 24 months following the Effective Date, no member of the Shareholder Group will acquire (directly or indirectly), other than as a result of the death of a member of the Shareholder Group, a distribution from an estate or in connection with an application or proceeding under the Family Law Act (Ontario), Family Law Act (Alberta), the Divorce Act (Canada) or any comparable laws or legislation or any legislation conce...
Prohibited Securities. (1) Each Shareholder hereby declares that it has no current intention to:
(a) acquire; or
(b) cause a person, including a trust or partnership, over which it has influence, to acquire, either directly or indirectly, any shares, warrants, debt instruments or other securities of any Prohibited Issuer (the aforesaid securities are hereinafter referred to as “Prohibited Securities”) with the exception of any Prohibited Securities that such Shareholder may acquire, directly or indirectly by reason of Prohibited Securities being acquired by (i) a mutual fund (or like investment vehicle) over which such Shareholder does not have any influence and in which such Shareholder owns (directly or indirectly) an interest, or by (ii) an independent investment manager who acquires the Prohibited Securities, by reason of its own independent decision and without any consultation with such Shareholder.
(2) As evidence of each Shareholder’s current intention not to acquire any Prohibited Securities, each Shareholder hereby undertakes that it will not under any circumstances prior to the Effective Time or within the twelve (12) month period following the Effective Time:
(a) acquire any Prohibited Securities (except for those described in (i) or (ii) above); or
(b) cause any person (including a trust or partnership) over which such Shareholder has influence to acquire Prohibited Securities.
Prohibited Securities. Unless agreed to in advance and in writing (e-mail will be sufficient) by the Company, the investment manager will not invest in the following types of securities:
1. Direct investments in mortgage loans, except for mortgage backed securities issued by an agency of the US Government or a US domiciled corporation.
2. Interest only, principal only and inverse floating rate securities.
3. Direct investments in real estate.
4. Private placement investments. This includes but is not limited to securities in which a liquid market is not readily available.