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restrictive covenant

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Restrictive Covenant
A bond covenant that forbids the issuer from taking certain actions. For example, a restrictive covenant may prevent an issuer from issuing more debt until the bond matures. More commonly, a restrictive covenant limits the dividends an issuer may pay to shareholders so as to reduce the risk to the bond. It contrasts with a positive covenant, which requires the issuer to take certain enumerated actions. It is also called a negative covenant.

restrictive covenant
See covenant.

restrictive covenant
A deed restriction. See covenant.


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A restrictive covenant offends public policy as a restraint of trade and therefore will be prima facie void from the beginning unless a court concludes that it is reasonable as between the parties.
[ILLUSTRATION OMITTED] Caption: Clifton Budd & DeMaria's Daniel Moreland (left) and Matthew Siebel hosted a special presentation on Drafting and Enforcing Restrictive Covenants at Yale Club on Vanderbilt Avenue.
The five-year franchise contained a restrictive covenant which made clear that Mr Kerr would not engage in any business which competed with ChipsAway's own presence in that area without ChipsAway's written consent for 12 months after the franchise ended.
 
 
 
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