Common use of Distribution restriction Clause in Contracts

Distribution restriction. Neither the Borrower nor any of the Subsidiary Entities shall declare or make any Shareholder Distribution; provided, however, BULLC and Best Access may declare and make Shareholder Distributions to First Thoroughbred, and First Thoroughbred may declare Shareholder Distributions to the Borrower; provided further, the Borrower may declare and make Shareholder Distributions (i) in a maximum amount not to exceed in any Fiscal Year an amount equal to the federal, state and/or other income tax which is payable by the shareholders of the Borrower in such Fiscal Year in respect to the taxable income of the Borrower for either the Borrower's immediately preceding Fiscal Year or as estimated payments for the Borrower's current Fiscal Year so long as the Borrower continuously maintains its status as a corporation recognized for federal income tax purposes as an "S" Corporation under the Internal Revenue Code, as amended.