Restricted Repayments Clause Samples
The Restricted Repayments clause limits a party’s ability to make certain payments, such as repaying loans or distributing funds, under specified conditions. Typically, this clause applies to borrowers in a loan agreement, preventing them from repaying subordinated debt, making dividends, or transferring assets unless certain financial thresholds or lender consents are met. Its core function is to protect the interests of the lender by ensuring that the borrower maintains sufficient resources to meet its primary obligations and does not undermine the lender’s security by making payments to other parties.
Restricted Repayments. The Borrower will not, and will not permit any Restricted Subsidiary to declare, make or pay, directly or indirectly, any Restricted Payments with respect to the Borrower or any of its Restricted Subsidiaries, except:
(a) any Restricted Subsidiary of the Borrower may make Restricted Payments to the Borrower or to any direct or indirect wholly-owned Restricted Subsidiary of the Borrower, and any non-wholly-owned Restricted Subsidiary may make Restricted Payments to the Borrower or any of its other Restricted Subsidiaries and to each other owner of Equity Interests of such Restricted Subsidiary ratably based on their relative ownership interests of the relevant class of Equity Interests;
(b) the Borrower or any Restricted Subsidiary may declare and make dividends payable solely in additional shares of Qualified Equity Interests and may exchange Equity Interests for its Qualified Equity Interests;
(c) the Borrower or any Restricted Subsidiary may (x) repurchase fractional shares of its Equity Interests arising out of stock dividends, splits or combinations, business combinations or conversions of convertible securities or exercises of warrants or options, (y) “net exercise” or “net share settle” warrants or options or (z) make cash settlement payments upon the exercise of warrants or options to purchase its Equity Interests;
(d) the Borrower or any Restricted Subsidiary may redeem or otherwise cancel Equity Interests or rights in respect thereof granted to (or make payments on behalf of) directors, officers, management, employees or other providers of services to the Borrower and its Subsidiaries (i) in an amount required to satisfy tax withholding obligations relating to the vesting, settlement or exercise of such Equity Interests or rights or (ii) upon the death, disability, retirement or termination of employment or services;
(e) the Borrower or any Restricted Subsidiary may make Restricted Payments pursuant to and in accordance with (i) stock incentive plans, (ii) stock option plans, (iii) stock buyback agreements, plans or programs, (iv) bonus plans, (v) compensation plans or (vi) other benefit plans or agreements for officers, directors, management, employees or other eligible service providers of the Borrower or its Subsidiaries;
(f) Borrower or any Restricted Subsidiary may make Restricted Payments not otherwise permitted under this Section 6.06 using the proceeds of any issuance of Equity Interests; provided that the Restricted Payment and the issuan...
Restricted Repayments. The Company will not during any fiscal year directly or indirectly purchase, redeem or otherwise acquire or retire any of its capital stock (except out of the proceeds of, or in exchange for, a substantially concurrent issue and sale of its capital stock) (each such non-exempted purchase, redemption, retirement and distribution in respect to capital stock being herein collectively called a "Restricted Redemption") if at the time of such Restricted Redemption or immediately after giving effect thereto, any Event of Default or Default shall occur or be continuing; provided that the Company shall not directly or indirectly purchase, redeem or otherwise acquire or retire any of its capital stock (except out of the proceeds of, or in exchange for, a substantially concurrent issue and sale of its capital stock) in excess of 5% of its capital stock during any fiscal year.
Restricted Repayments. The Company will not during any fiscal year directly or indirectly purchase, redeem or otherwise acquire or retire any of its capital stock (except out of the proceeds of, or in exchange for, a substantially concurrent issue and sale of its capital stock); provided, however, that the foregoing shall not operate to prevent the Company from repurchasing its common stock or common stock options provided that at the time of each such purchase and immediately after giving effect thereto, no Default or Event of Default shall occur or be continuing.