BASIS AND IN THE ORDINARY COURSE OF
ITS BUSINESS CONSISTENT WITH PAST PRACTICES.
6.14
RESTRICTED PAYMENTS.
(A)
SUCH CREDIT PARTY SHALL NOT MAKE ANY
RESTRICTED PAYMENT, EXCEPT (I) PAYMENTS OF INTEREST AND PRINCIPAL OF
INTERCOMPANY LOANS AND ADVANCES BETWEEN BORROWER AND SECURED GUARANTORS AND
BETWEEN THE FRENCH OPERATING COMPANIES, SCHAUBLIN AND SCHAUBLIN HOLDING, AND
SCHAUBLIN, SCHAUBLIN HOLDING AND BORROWER, RESPECTIVELY, TO THE EXTENT SUCH
INTERCOMPANY LOANS AND ADVANCES ARE PERMITTED BY SECTION 6.2 AND SECTION 6.3,
(II) DIVIDENDS AND DISTRIBUTIONS BY SUBSIDIARIES OF BORROWER PAID TO BORROWER OR
TO AN INTERMEDIATE SUBSIDIARY OF BORROWER WHICH IS THE DIRECT HOLDER OF STOCK IN
THE SUBSIDIARY MAKING A DIVIDEND ON OTHER DISTRIBUTION, AS APPLICABLE,
(III) TRANSACTIONS PERMITTED UNDER SECTION 6.4(B), (IV) PAYMENTS OF MANAGEMENT
FEES TO WHITNEY & CO. IN EQUAL QUARTERLY INSTALLMENTS, AS LONG AS SUCH PAYMENTS
OF MANAGEMENT FEES DO NOT EXCEED $450,000 IN THE AGGREGATE DURING ANY FISCAL
YEAR, (V) SCHEDULED PAYMENTS OF INTEREST WITH RESPECT TO THE SENIOR SUBORDINATED
DEBT OR ANY REFINANCING THEREOF PERMITTED UNDER SECTION 6.3(A)(VII) SUBJECT TO
THE SUBORDINATION PROVISIONS SET FORTH IN THE APPLICABLE NOTE PURCHASE AGREEMENT
OR INDENTURE, (VI) DIVIDENDS OR DISTRIBUTIONS PAYABLE TO HOLDINGS SOLELY IN
COMMON STOCK OF HOLDINGS, (VII) PAYMENTS TO DR. MICHAEL J. HARTNETT NOT TO
EXCEED THOSE SET FORTH IN THAT CERTAIN EMPLOYMENT AGREEMENT, DATED DECEMBER 18,
2000, BY AND BETWEEN BORROWER AND DR. MICHAEL J. HARTNETT, AS IN EFFECT ON THE
CLOSING DATE AND (VIII) PAYMENTS AND DISTRIBUTIONS WITH RESPECT TO ZERO COUPON
DEBT AND SENIOR SUBORDINATED NOTES PERMITTED IN ACCORDANCE WITH SECTION
6.3(A)(VII); AND PROVIDED, THAT NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING OR WOULD RESULT AFTER GIVING EFFECT TO ANY RESTRICTED PAYMENT
PURSUANT TO CLAUSE (IV) ABOVE.
53
(B)
NOTWITHSTANDING THE FOREGOING SECTION
6.14(A), BORROWER MAY PAY CASH DIVIDENDS TO HOLDINGS ("DIVIDENDS") AS LONG AS
(A) PROMPTLY UPON RECEIPT THEREOF, HOLDINGS IMMEDIATELY USES ALL OF THE PROCEEDS
OF SUCH DIVIDENDS SOLELY FOR ONE OR MORE OF THE FOLLOWING PURPOSES:
(I) PAYMENT
OF SCHEDULED INTEREST AS OF THE CLOSING DATE ON, AND THE REDEMPTION REQUIRED AS
OF THE CLOSING DATE OF, THE ZERO COUPON DEBT, (II) PAYMENT OF DIVIDENDS ON THE
PREFERRED STOCK OF HOLDINGS, (III) PAYMENTS AT SUCH TIMES AND IN SUCH AMOUNTS AS
ARE SUFFICIENT TO ENABLE HOLDINGS TO PAY THE FEDERAL AND STATE INCOME TAXES
ATTRIBUTABLE TO THE TAXABLE INCOME OF BORROWER AND SUBSIDIARIES PURSUANT TO THE
TAX SHARING AGREEMENT, (IV) REPURCHASE OF HOLDINGS' STOCK FROM EMPLOYEES OR
FORMER EMPLOYEES AN AGGREGATE AMOUNT NOT TO EXCEED $500,000 PER YEAR, IT BEING
AGREED THAT NO MORE THAN $100,000 OF SUCH AGGREGATE AMOUNT MAY CONSIST OF SUCH
REPURCHASES FROM EMPLOYEES WHOSE EMPLOYMENT CONTINUES, (V) DIVIDENDS FROM
BORROWER TO HOLDINGS NOT TO EXCEED $100,000 IN THE AGGREGATE IN ANY FISCAL YEAR
TO PAY THE OPERATING EXPENSES OF HOLDINGS, AND (VI) FUNDING REDEMPTIONS AS LONG
AS SUCH DIVIDENDS PAID FOR REDEMPTIONS DO NOT EXCEED $30,000,000 IN THE
AGGREGATE AFTER THE CLOSING DATE; (B) NO DEFAULT OR EVENT OF DEFAULT AND NO
DEFAULT OR AN