EMPLOYMENT WITH BORROWER
AND ITS AFFILIATES HAS BEEN TERMINATED AND TO REPURCHASE STOCK REMITTED BACK TO
HOLDINGS BY EMPLOYEES OF BORROWER WITH RESPECT TO RESTRICTED STOCK UNITS OF SUCH
EMPLOYEES, PROVIDED THAT SUCH DIVIDEND PAYMENTS SHALL NOT EXCEED $5,000,000 IN
ANY FISCAL YEAR AND PROVIDED THAT NO EVENT OF DEFAULT EXISTS AT THE TIME OF SUCH
RESTRICTED PAYMENT OR WOULD OCCUR AS A RESULT THEREOF (PROVIDED THAT (I) THE
FOREGOING PROVISO SHALL NOT APPLY TO AMOUNTS EXPENDED BY HOLDINGS PURSUANT TO
THIS CLAUSE (C) SOLELY FROM (X) CASH PROCEEDS RECEIVED FROM NEW ISSUANCES OF
HOLDINGS COMMON STOCK IF RECEIVED SUBSTANTIALLY CONTEMPORANEOUSLY WITH AND USED
SOLELY TO EFFECT A REDEMPTION OF AN EXECUTIVE'S STOCK AND (Y) THE PROCEEDS OF
KEY MAN LIFE INSURANCE IF THE PROCEEDS ARE USED TO REPURCHASE THE STOCK
DESCRIBED ABOVE FROM A DECEASED OR INCAPACITATED EMPLOYEE OR MANAGER, AND
(II) HOLDINGS MAY REPURCHASE HOLDINGS COMMON STOCK FROM MANAGEMENT OF BORROWER
OR ANY SUBSIDIARY THROUGH THE CANCELLATION OF INDEBTEDNESS OWING BY SUCH OFFICER
OR MANAGER);
(D)
TO THE EXTENT THAT SUCH PAYMENTS ARE RESTRICTED PAYMENTS, ANY
PAYMENTS OR DISTRIBUTIONS MADE BY HOLDINGS OR ANY OF ITS SUBSIDIARIES TO
EMPLOYEES UNDER SECTION 2.02(A)(VI) AND SECTION 6.01(E) OF THE PURCHASE
AGREEMENT (AS IN EFFECT ON THE RESTATEMENT DATE) IN AN AMOUNT NOT TO EXCEED
$2,300,000; AND
33
(E)
IN ADDITION TO THE STOCK REPURCHASES PERMITTED BY THE FOREGOING
CLAUSE (C), BORROWER MAY MAKE RESTRICTED PAYMENTS TO HOLDINGS TO PERMIT HOLDINGS
TO MAKE DIVIDENDS TO ITS STOCKHOLDERS AND REPURCHASE ITS STOCK, SO LONG AS SUCH
RESTRICTED PAYMENTS, WHEN AGGREGATED WITH ALL RESTRICTED PAYMENTS PREVIOUSLY
MADE AFTER THE RESTATEMENT DATE PURSUANT TO THIS SECTION 3.5(E), DO NOT EXCEED
AN AMOUNT EQUAL TO 20% OF THE SUM OF (I) CUMULATIVE POSITIVE NET INCOME OF
BORROWER AND ITS SUBSIDIARIES FOR THE PERIOD FROM JANUARY 1, 2009 THROUGH THE
END OF THE MOST RECENT FISCAL QUARTER OR FISCAL YEAR FOR WHICH BORROWER HAS
DELIVERED THE FINANCIAL STATEMENTS REQUIRED PURSUANT TO SECTION 4.5(A) OR
(B) PLUS (II) NON-CASH STOCK COMPENSATION EXPENSE AS THE RESULT OF ANY GRANT OF
STOCK TO ANY EMPLOYEES OR MANAGEMENT OF HOLDINGS, BORROWER OR ANY OF THEIR
SUBSIDIARIES FOR SUCH PERIOD PLUS (III) AMORTIZATION ASSOCIATED WITH INTANGIBLE
ASSETS OF HOLDINGS, BORROWER OR ANY OF THEIR SUBSIDIARIES FOR SUCH PERIOD;
PROVIDED, THAT (A) ANY SUCH RESTRICTED PAYMENT MAY NOT BE MADE PRIOR TO THE DATE
WHICH IS EIGHTEEN MONTHS FOLLOWING THE RESTATEMENT DATE, (B) AT THE TIME OF SUCH
RESTRICTED PAYMENT THERE SHALL EXIST NO DEFAULT OR EVENT OF DEFAULT, (C) BOTH
BEFORE AND AFTER GIVING EFFECT TO SUCH RESTRICTED PAYMENT ON A PRO FORMA BASIS,
BORROWER IS IN COMPLIANCE WITH THE COVENANTS SET FORTH IN SECTIONS 4.2 AND 4.3
AND HAS A PRO FORMA LEVERAGE RATIO OF NOT MORE THAN 1.5 TO 1.0, AND (D) AFTER
GIVING EFFECT TO SUCH RESTRICTED PAYMENT, AT LEAST $15,000,000 OF REQUIRED
AVAILABILITY WOULD EXIST.
3.6
RESTRICTION ON FUNDAMENTAL CHANGES.
Holdings and Borrower shall not and shall not cause or permit Borrower's
Subsidiaries to directly or