Common use of Limitation on Dividends Clause in Contracts

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings or any Subsidiary of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or payment.

Limitation on Dividends. Declare The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of such Personthe Borrower or its Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person the Borrower or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or a limited liability company, make any distribution with respect to the ownership interests therein, or, in either case, any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary of Holdings(such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings any Subsidiary (other than WTAC) may declare and pay dividends to Holdings (make Restricted Payments to the extent necessary to pay interest on, or redeem, the TIDES Debentures Borrower or to cover operating expenses any other Wholly Owned Subsidiary of Holdings) the Borrower and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as commencing February 1, 2004, the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings Borrower may make open market repurchases Restricted Payments to CCI for the purpose of shares permitting CCI to make regularly scheduled payments of Holdings common stock so long interest on the CCI Notes as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (required pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends CCI Indenture as in effect on shares of Holdings common stock, the Closing Date; provided that in each case (A) no Default has occurred and is continuing or would result from the making of such Restricted Payment, (B) the aggregate amount of such declarations all Restricted Payments made on or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date shall not exceed an amount equal to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to difference between (x) the Cumulative Credit and (y) 1.4 times Cumulative Interest Expense (and the Agent shall have received a certificate of a Responsible Officer of the Borrower setting forth calculations supporting the condition described in this clause (y) and (C) with respect to clause (ii) above, no such Restricted Payment shall be permitted during any period in which the Lenders pursuant Maximum Total Debt Ratio equals or exceeds 5.50 to subsection 10.1 at or prior to the time of such declaration or payment1.00.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such PersonPerson or in options, warrants or rights to purchase such common stock) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Hanover or any Subsidiary of HoldingsHanover (collectively, “Restricted Payments”), except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings Hanover may declare and pay dividends to Holdings Hanover (to the extent necessary to pay interest on, or redeem, the TIDES Debentures and any Refinancing Indebtedness incurred in respect thereof or to cover operating expenses of HoldingsHanover) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustTrust and any Refinancing Indebtedness incurred in respect thereof, (ii) Holdings Hanover may repurchase or redeem shares of Holdings Hanover common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings Subsidiaries of Hanover may declare and pay dividends, or make open market repurchases of shares of Holdings common stock so long as distributions, to Hanover to the aggregate amount of all such repurchases since extent necessary to allow Hanover to pay scheduled interest on the Closing Date does not exceed $25,000,0002008 Notes and any Refinancing Indebtedness incurred in respect thereof, (iv) Holdings Subsidiaries of Hanover may declare and pay dividends, or pay dividends on and make mandatory stock repurchases (pursuant distributions, to Hanover to the terms extent necessary to allow Hanover to pay interest when due on (or, after the conversion of such notes, to the applicable certificate extent necessary to allow Hanover to make required dividend payments on such converted Capital Stock; provided, that in no event shall such dividend payments exceed the amount of designationinterest payments that would have been otherwise required on the Hanover Convertible Notes assuming no conversion had occurred) the Hanover Convertible Notes and any Refinancing Indebtedness incurred in respect thereof, (v) Subsidiaries of its preferred stockHanover may declare and pay dividends, if anyor make distributions, to Hanover to the extent necessary to allow Hanover to pay interest when due on the 2003 Notes and any Refinancing Indebtedness incurred in respect thereof, and (vvi) Holdings any Subsidiary may declare make Restricted Payments to HCLP or pay dividends on shares to any Subsidiary of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentHCLP.

Limitation on Dividends. Declare The Borrower shall not, and shall not permit any of its Subsidiaries to (i) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of such Personthe Borrower or its Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person the Borrower or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (ii) if a partnership or a limited liability company, make any distribution with respect to the ownership interests therein, or, in either case, any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary of Holdings(such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings any Subsidiary may declare and pay dividends to Holdings (make Restricted Payments to the extent necessary to pay interest on, or redeem, the TIDES Debentures Borrower or to cover operating expenses any other Wholly Owned Subsidiary of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustBorrower, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as commencing February 1, 2004, the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings Borrower may make open market repurchases Restricted Payments to CCI for the purpose of shares permitting CCI to make regularly scheduled payments of Holdings common stock so long interest on the CCI Notes as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (required pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends CCI Indenture as in effect on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date and (iii) the Borrower may make Restricted Payments to CCI to pay administrative expenses and taxes in an amount not to exceed $1,000,000 in any fiscal year; provided that in each case (A) no Default has occurred and is continuing or would result from the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time making of such declaration Restricted Payment and (B) with respect to clause (ii) above, no such Restricted Payment shall be permitted during any period in which the Maximum Total Debt Ratio equals or paymentexceeds 5.50 to 1.00.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings or any Subsidiary of HoldingsHoldings (collectively, "Restricted Payments"), except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,00075,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such purchases, declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Amended and Restated Effective Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to subsection 10.1 7.1 at or prior to the time of such declaration or payment, (vi) HCC may declare and pay dividends or make distributions to Holdings to the extent necessary to allow Holdings to make payments on its promissory notes to be issued in favor of the sellers of the KCC Group Limited so long as (A) the aggregate amount of such declarations, payments or distributions pursuant to this clause (vi) does not exceed (pound)6,000,000 (UK) plus accrued interest thereon and (B) no such dividend may be paid more than three Business Days prior to the date the equivalent payment is made on such notes, (vii) Subsidiaries of Holdings may declare and pay dividends, or make distributions, to Holdings to the extent necessary to allow Holdings to pay interest on, or redeem, the 2008 Notes, (viii) Subsidiaries of Holdings may declare and pay dividends, or make distributions, to Holdings to the extent necessary to allow Holdings to pay interest when due on the New Convertible Notes (in each case subject to any applicable subordination provisions) and (ix) any Subsidiary may make Restricted Payments to Holdings or any Subsidiary.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock capital stock of such Person the Borrower or any warrants or options to purchase any such Stockstock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary, except for (a)(i) payment by the Borrower of amounts then owing to management personnel of the Borrower pursuant to the terms of their respective employment contracts or under any employee benefit plan, (ii)mandatory purchases by the Borrower of its common stock from management personnel pursuant to the terms of their respective employment agreements or any employee benefit plan, (iii)additional repurchases by the Borrower of its common stock from management personnel, and other officers or employees of the Borrower or any Subsidiary in an amount not to exceed $35,000,000 in the aggregate and (iv) the purchase, redemption or retirement of Holdingsany shares of any capital stock of the Borrower or options to purchase capital stock of the Borrower in connection with the exercise of outstanding stock options, except that (b) if no Default or Event of Default exists has occurred and is continuing (or would reasonably occur and be expected continuing after giving effect thereto) when any such dividend is declared by the Board of Directors of the Borrower or such payment is made on the account of the purchase of capital stock of the Borrower, cash dividends on the Borrower's capital stock or such payments made on the account of the purchase of capital stock of the Borrower not to be caused thereby exceed, in the aggregate, in any fiscal quarter (the "Payment Quarter") an amount equal to the greater of (i) $25,000,000 and (ii) (A) 50% (100% if the Borrower shall have attained Investment Grade Status) of Consolidated Net Income of the Borrower and its consolidated Subsidiaries for the period of Holdings may declare four consecutive fiscal quarters ended immediately prior to the Payment Quarter (such period of four quarters being the "Calculation Period" in respect of such Payment Quarter), less (B) the cash amount of all (I) dividends paid and pay dividends to Holdings redemptions made by the Borrower during such Calculation Period in respect of capital stock and (II) payments made on the account of the purchase of capital stock of the Borrower during such Calculation Period, but only to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated permitted by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if anyoutstanding Subordinated Debt, and (vc) Holdings may declare dividends or pay dividends on distributions in the form of additional shares of Holdings common such capital stock or in options, warrants or other rights to purchase capital stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or payment.

Limitation on Dividends. Declare PATRONAGE REFUNDS AN& OTHER CASH DISTRIBUTIONS: The Mortgagor will not, in any Calendar Year, without the approval in writing of the Mortgagee, declare or pay any dividend (other than dividends payable solely in common stock of such Person) onor pay or determine to pay any patronage refunds, or make retire any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, patronage capital or make any other cash distributions (such dividends, refunds, retirement and other distributions being hereinafter collectively called "distributions"), to its members, stockholders or consumers if after giving effect to any such distribution the total Equity of the Mortgagor will not equal or exceed 40% of its total assets and other debits; PROVIDED, HOWEVER, that in respect thereof, either directly or indirectly, whether in cash or property or in obligations any event the Mortgagor may make distributions to estates of Holdings or any Subsidiary of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (deceased patrons to the extent necessary to pay interest onrequired or permitted by its articles of incorporation and bylaws, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stockand, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant distributions to this clause (v) above does such estates do not exceed 25% of the Consolidated Net Income of Holdings for patronage capital and margins received by the period (taken Mortgagor in the next preceding year, make such additional distributions in any year as one accounting period) from will not cause the beginning total distributions in such year to exceed 25% of the first fiscal quarter commencing patronage capital and margins received in such next preceding year, and PROVIDED, FURTHER, HOWEVER, that in no event will the Mortgagor make any distributions if there is unpaid when due any installment of principal of or interest on the Notes, if the Mortgagor is otherwise in default hereunder or if, after giving effect to any such distribution, the Closing Date Mortgagor's total current and accrued assets would be less than its total current and accrued liabilities. For the purpose of this section a "cash distribution" shall be deemed to include any general cancellation or abatement of charges far electric energy or services furnished by the end Mortgagor, but not the repayment of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to a membership fee upon termination of a membership and not the Agent and rebate of an abatement of costs incurred by the Lenders pursuant to subsection 10.1 at or prior to the time Mortgagor, such as a reduction of such declaration or paymentwholesale power cost previously incurred.

Limitation on Dividends. Declare Quiksilver shall not, and shall not permit any of its Subsidiaries to, (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of such PersonQuiksilver or its Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person Quiksilver or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or a limited liability company, make any distribution with respect to the ownership interests therein, or, in either case, any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Quiksilver or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments") provided, however, that (i) Quiksilver shall be permitted to make payments on account of, and set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of Holdingsany shares of its common stock, except that if or any warrants or options to purchase its common stock, not exceeding US$20,000,000 in the aggregate, so long as no Default or Event of Default exists has occurred and is continuing or would reasonably be expected to be caused thereby (i) Subsidiaries by any of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trustforegoing, (ii) Holdings may repurchase or redeem shares of Holdings common stock from Quiksilver and its employees and former employees Subsidiaries shall be permitted to make other Restricted Payments so long as (x) after giving pro forma effect thereto, average daily Availability was not less than (x) if the aggregate amount Guarantee Date has not yet occurred, US$25,000,000, or (y) on and after the Guarantee Date, US$40,000,000, for any period of all thirty consecutive days during the 12-month period ending on the date on which such repurchases since Restricted Payment is to be made, (y) the Closing Date does not exceed $7,500,000, Fixed Charge Coverage Ratio exceeds 1.25 to 1.00 after giving pro forma effect to such Restricted Payment as if such Restricted Payment was paid on the first day of the relevant period and (z) no Default or Event of Default has occurred and is continuing or would be caused thereby and (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000Subsidiaries shall in any case be permitted to pay cash dividends and other distributions, (iv) Holdings may declare directly or pay dividends on and make mandatory stock repurchases (pursuant indirectly, to Quiksilver or any Subsidiary, to the terms extent paid ratably to all stockholders of the Person paying the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare dividend or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentcontribution.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Personthe Borrower) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person the Borrower or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasances, retirements, acquisitions and distributions being herein called "Restricted Payments"). Notwithstanding the foregoing, however, the Borrower may repurchase the Capital Stock of Holdingsthe Borrower pursuant to any currently existing or subsequently adopted stock repurchase program without any limitation, except provided, that the ratio of Consolidated Senior Indebtedness to Consolidated EBITDA as of the last day of any Rolling Period (calculated on a pro forma basis as if no Default or Event such repurchase of Default exists or would reasonably be expected Capital Stock of the Borrower, and the incurrence of any Indebtedness by any Loan Party in connection therewith, had occurred immediately prior to be caused thereby such day) is less than 1.0 to 1.0. From and after the last day of any Rolling Period (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (beginning with the Rolling Period ended immediately prior to the extent necessary Closing Date) for which the ratio of Consolidated Senior Indebtedness to pay interest onConsolidated EBITDA as of the last day of any such Rolling Period (calculated on a pro forma basis as if such repurchase of Capital Stock of the Borrower, and the incurrence of any Indebtedness by any Loan Party in connection therewith, had occurred immediately prior to such day) is 1.0 to 1.0 or redeemgreater (such day, the TIDES Debentures or "Limitation Date"), the Borrower shall be subject to cover operating expenses a limitation of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as $15,000,000 in the aggregate amount of for all such repurchases since of Capital Stock (the Closing Date does "Limitation") from and after the Limitation Date. The Limitation described previously shall not exceed be applicable during any subsequent Rolling Period in which the ratio described herein for such Rolling Period is less than 1.0 to 1.0. For any subsequent Rolling Period in which the ratio described herein for such Rolling Period is 1.0 to 1.0 or greater, the Limitation shall again be $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as 15,000,000 in the aggregate amount of all from and after any such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentsubsequent Rolling Period.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings HCC or any Subsidiary of HoldingsHCC, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings HCC may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) HCC and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustSubsidiaries, (ii) Holdings HCC may repurchase or redeem shares of Holdings HCC common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date date of this Agreement does not exceed $7,500,0002,500,000, (iii) Holdings HCC may make open market repurchases of shares of Holdings HCC common stock so long as the aggregate amount of all such repurchases since during the Closing Date term of this Agreement does not exceed $25,000,000, (iv) Holdings HCC may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings HCC may declare or pay dividends on shares of Holdings HCC common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings HCC for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' HCC's most recently ended fiscal quarter for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to subsection 10.1 7.1 at or prior to the time of such declaration or payment.

Limitation on Dividends. Declare The Borrower shall not, and shall not ----------------------- permit any of its Subsidiaries to, (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of such Personthe Borrower or its Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person the Borrower or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or a limited liability company, make any distribution with respect to the ownership interests therein, or, in either case, any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary of Holdings(such declarations, except payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"); ------------------- provided that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings each Subsidiary may declare and pay dividends to Holdings (make Restricted Payments to the extent necessary to pay interest on, or redeem, the TIDES Debentures -------- ---- Borrower or to cover operating expenses of Holdings) another wholly-owned Subsidiary and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings the Borrower may repurchase make Restricted Payments if (A) the Maximum Total Debt Ratio as of the most-recently ended fiscal quarter of the Borrower is less than 4.50:1.00, (B) no Default has occurred and is continuing or redeem shares would result from the making of Holdings common stock from its employees such Restricted Payment, including under Section 6.1(c) (including, for the purposes of calculating the Fixed Charge Coverage Ratio, such Restricted Payment as a fixed charge pursuant to clause (iv) of the definition of "Fixed Charge Coverage Ratio") and former employees so long as (C) such Restricted Payment, together with the aggregate amount of all such repurchases since other Restricted Payments made by the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing Borrower after the Closing Date to Second Amendment Effective Date, is less than the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentRestricted Payment Threshold.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of the Person making such Persondividend) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person Packard or any Subsidiary or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Packard or any Subsidiary of Holdings(collectively, "Restricted Payments"), except that if (i) any Subsidiary may make Restricted Payments to Packard or any Wholly Owned Subsidiary Guarantor; (ii) any Foreign Subsidiary may make Restricted Payments to any other Subsidiary; and (iii) so long as no Default or Event of Default exists or would reasonably be expected to be caused thereby has occurred and is continuing, Packard and any of its Subsidiaries may (iA) Subsidiaries of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock its Capital Stock from employees, former employees, directors or former directors of Packard or any of its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (Subsidiaries pursuant to the terms of the applicable certificate agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of designation) Directors of its preferred stockPackard under which such individuals purchase or sell or are granted the option to purchase or sell, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stocksuch Capital Stock, provided that the aggregate amount of such declarations or payments pursuant repurchases in any calendar year (excluding any such repurchases made through the issuance of Management Notes) (collectively, "Management Stock Payments"), when added to this clause (v) above does the amount of any Management Note Payments made during such calendar year, shall not exceed 25% $2,000,000; and (B) repurchase, redeem or acquire or retire for value any shares of the Consolidated Net Income Capital Stock of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for Packard which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or were owned immediately prior to the time closing of the Recapitalization by Non-Management Stockholders (as defined in the Recapitalization Agreement) and which Packard made an offer to repurchase pursuant to Section 2.2 of the Recapitalization Agreement but which were not tendered to Packard, provided that the purchase price per share for such declaration or paymentshares of Capital Stock of Packard shall not exceed $22.25 per share and any such shares of Capital Stock are purchased within 90 days of the Closing Date.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Persona Holding Company, the Borrower or a Domestic Subsidiary) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person the Borrower or any of its Subsidiaries or Holding Companies or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary of Holdings, except or Holding Company; PROVIDED that if as long as no Default or Event of Default exists has occurred and is continuing or would reasonably be expected result therefrom, the Borrower may pay dividends to be caused thereby Astor II (which may pay dividends to Astor Holdings, Inc.) to redeem Preferred Stock in an aggregate amount not exceeding 50% of the Net Proceeds of an initial public offering of common stock by the Borrower or Astor II after the Closing Date and PROVIDED FURTHER that the foregoing provisions will not prohibit (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (or distributions payable to the extent necessary Borrower or any Subsidiary (and, if such Subsidiary has shareholders other than the Borrower or another Subsidiary, to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and its other shareholders of on a PRO RATA basis to such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trustother shareholders), (ii) Holdings may repurchase the payment of dividends by the Borrower or redeem shares ABI Acquisition 1 plc to Astor II and by Astor II to Astor Holdings, Inc., solely in amounts and at the times necessary, to permit payment of Holdings common stock from its employees and former employees so long as amounts required for any repurchase, redemption or other acquisition for value of any Capital Stock of Astor Holdings, Inc. (or Astor II) held by any member of the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000Borrower's, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000Astor II's or Astor Holdings, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (Inc.'s management pursuant to any management equity subscription agreement or stock option agreement or similar agreement, or otherwise upon their death, disability, retirement or termination of employment or departure from the terms Board of Directors of the applicable certificate of designation) of its preferred stockBorrower, if anyAstor II or Astor Holdings, and Inc. (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of price paid for all such declarations repurchased, redeemed, acquired or payments pursuant to this clause (v) above does retired Capital Stock shall not exceed 25% of (A) $500,000 in any twelve-month period or (B) $2,000,000 in the Consolidated Net Income of Holdings for the period (taken as one accounting period) aggregate from the beginning of the first fiscal quarter commencing and after the Closing Date Date) and (iii) the payment of dividends by the Borrower or ABI Acquisition 1 plc to Astor II, or by Astor II to Astor Holdings, Inc., in amounts and at the end times necessary to permit payment of (A) amounts payable by Astor Holdings' most recently ended fiscal quarter for which financial statements have been delivered , Inc. under the Management Services Agreement, (B) amounts due under the Tax Sharing Agreement, (C) administrative fees in respect of certain partnerships that are investors in Astor Holdings, Inc., in an aggregate amount not exceeding $28,000 in any twelve-month period and (D) operating expenses of Astor Holdings, Inc. and Astor II incurred in the ordinary course of business in an aggregate amount not to exceed $50,000 in any twelve-month period plus audit fees and fees paid with respect to filings by Astor Holdings, Inc. or Astor II with the Agent Securities and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentExchange Commission.

Limitation on Dividends. Declare New Member covenants to the Beneficiaries that it will not, and will not permit any of its Restricted Subsidiaries that is not wholly-owned by New Member to, pay or pay declare any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, stock or make any other distribution in respect thereofon account of any class of its stock, either or redeem, purchase or otherwise acquire, directly or indirectly, whether any shares of its stock (all of the foregoing being herein called “Restricted Payments”) other than (x) Restricted Payments payable solely in Capital Stock either made by any Guarantor to another Guarantor or made by New Member to any Person or (y) Restricted Payments to CSX, unless (a) New Member shall have provided to the Beneficiary Representative 15 days’ prior notice of its intent to make a Restricted Payment, which notice shall contain a reasonably detailed description of the Restricted Payment, (b) the Interest Coverage Ratio of the Guarantors shall not be less than 1.90 to 1.00 on a pro forma basis after giving effect to any Indebtedness incurred in connection with any proposed Restricted Payment as if incurred at the commencement of the period of four consecutive fiscal quarters then most recently ended and, if such Restricted Payment is a dividend or distribution of any part of the business or non-cash assets of any Guarantor, after giving pro forma effect to such dividend or property or in obligations distribution as if effected at the commencement of Holdings or any Subsidiary the period of Holdingsfour consecutive fiscal quarters then most recently ended, except that if (c) no Tier 1 Default or Tier 2 Event of Default exists shall have occurred and be continuing and no Guarantor shall have Knowledge that any event or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare circumstance that constitutes a Tier 2 Default has occurred and pay dividends to Holdings (to is continuing; provided, however, that the extent necessary to pay interest onforegoing shall not prevent or restrict the redemption, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares other acquisition or retirement for cash of Holdings common stock from its employees and former employees so long as the aggregate amount any Capital Stock held by any member of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (New Member’s management pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare any management equity subscription agreement or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentstock option agreement.

Limitation on Dividends. Declare or pay any dividend (other ------------------------------ than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings or any Subsidiary of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations -------- or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentpayment and (vi) HCC may declare and pay dividends or make distributions to Holdings to the extent necessary to allow Holdings to make payments on its promissory notes to be issued in favor of the sellers of the KCC Group Limited so long as (A) the aggregate amount of such declarations, payments or distributions pursuant to this clause (vi) does not exceed (Pounds)6,000,000 (UK) plus accrued interest thereon and (B) no such dividend may be paid more than three Business Days prior to the date the equivalent payment is made on such notes.

Limitation on Dividends. Declare Quiksilver shall not, and shall not permit any of its Subsidiaries to, (a) if a corporation, declare or pay any dividend (other than dividends payable 97 solely in common stock of such PersonQuiksilver or its Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person Quiksilver or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or a limited liability company, make any distribution with respect to the ownership interests therein, or, in either case, any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Quiksilver or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments") provided, however, that (i) Quiksilver shall be permitted to make payments on account of, and set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of Holdingsany shares of its common stock, except that if or any warrants or options to purchase its common stock, not exceeding US$20,000,000 in the aggregate, so long as no Default or Event of Default exists has occurred and is continuing or would reasonably be expected to be caused thereby (i) Subsidiaries by any of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trustforegoing, (ii) Holdings may repurchase or redeem shares of Holdings common stock from Quiksilver and its employees and former employees Subsidiaries shall be permitted to make other Restricted Payments so long as (x) after giving pro forma effect thereto, average daily Availability was not less than (x) if the aggregate amount Guarantee Date has not yet occurred, US$25,000,000, or (y) on and after the Guarantee Date, US$40,000,000, for any period of all thirty consecutive days during the 12-month period ending on the date on which such repurchases since Restricted Payment is to be made, (y) the Closing Date does not exceed $7,500,000, Fixed Charge Coverage Ratio exceeds 1.25 to 1.00 after giving pro forma effect to such Restricted Payment as if such Restricted Payment was paid on the first day of the relevant period and (z) no Default or Event of Default has occurred and is continuing or would be caused thereby and (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000Subsidiaries shall in any case be permitted to pay cash dividends and other distributions, (iv) Holdings may declare directly or pay dividends on and make mandatory stock repurchases (pursuant indirectly, to Quiksilver or any Subsidiary, to the terms extent paid ratably to all stockholders of the Person paying the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare dividend or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentcontribution.

Limitation on Dividends. Declare or pay any dividend (other ----------------------- than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings or any Subsidiary of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to -------- this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to subsection 10.1 7.1 at or prior to the time of such declaration or payment.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of the Person making such Persondividend) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, of any shares of any class of Capital Stock of such Person Packard or any Subsidiary or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Packard or any Subsidiary of Holdings(collectively, "RESTRICTED PAYMENTS"), except that if (i) any Subsidiary may make Restricted Payments to Packard or any Wholly Owned Subsidiary Guarantor, (ii) any Foreign Subsidiary may make Restricted Payments to any other Subsidiary; and (iii) so long as no Default or Event of Default exists or would reasonably be expected to be caused thereby has occurred and is continuing, Packard and any of its Subsidiaries may (iA) Subsidiaries of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings1) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock its Capital Stock from employees, former employees, directors or former directors of Packard or any of its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (Subsidiaries pursuant to the terms of the applicable certificate agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of designationDirectors of Packard under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock and (2) in addition to any other repurchases expressly permitted by the foregoing provisions of this Section 9.6, repurchase shares of its preferred stockCapital Stock from any Person, if anyPROVIDED, and (v) Holdings may declare or pay dividends on shares of Holdings common stockin each case, provided that the aggregate amount of such declarations or payments pursuant to this repurchases in any calendar year (excluding any such repurchases made through the issuance of Management Notes) permitted by clause (v1) above does (collectively, "MANAGEMENT STOCK PAYMENTS") and clause (2) above, when added to the amount of any Management Note Payments made during such calendar year, shall not exceed 25% $5,000,000 and (B) Packard may make cash payments in respect of the Consolidated Net Income tax obligations of Holdings for the period (taken as one accounting period) employees or directors of Packard or any of its Subsidiaries resulting from the beginning exercise by such Persons of options to purchase common stock of Packard in exchange for a corresponding reduction in the first fiscal quarter commencing after the Closing Date to the end number of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of shares obtainable upon such declaration or paymentexercise.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Personthe Company) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition ofof (other than for payment solely in common stock of the Company), any shares of any class of Capital Stock of such Person the Company or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Company or any Subsidiary of HoldingsRestricted Subsidiary, except provided that if at any time that (i) no Default or Event of Default exists has occurred and is continuing or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare result therefrom and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long the Total Leverage Ratio as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to at the end of Holdings' each of the then most recently ended two consecutive fiscal quarter quarters of the Company for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at 7.1 is less than 5.00:1.00, the Company may repurchase common stock of the Company held by shareholders other than that held by any employee, officer or director of the Company or any Restricted Subsidiary so long as (A) the aggregate amount applied to such repurchases does not exceed $25,000,000 in any calendar year, (B) the Total Leverage Ratio immediately upon giving effect to any such repurchase is less than 5.00:1.00 on a pro forma basis, using for the purposes of such determination Consolidated Operating Cash Flow for the four-quarter period ended on the last day of the second fiscal quarter referred to in clause (ii) above and Indebtedness on the date of such determination after giving effect to such repurchase and any borrowings made concurrently therewith, and (C) the Company shall have provided to each Lender reasonably prior to the time date of each such declaration or paymentrepurchase pro forma projections showing compliance with this Agreement after giving effect to such repurchase.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Personthe Borrower) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person the Borrower or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasances, retirements, acquisitions and distributions being herein called "Restricted Payments"). Notwithstanding the foregoing, however, the Borrower may repurchase the Capital Stock of Holdingsthe Borrower pursuant to any currently existing or subsequently adopted stock repurchase program without any limitation, except provided, that the ratio of Consolidated Total Indebtedness to Consolidated EBITDA as of the last day of any Rolling Period (calculated on a pro forma basis as if no Default or Event such repurchase of Default exists or would reasonably be expected Capital Stock of the Borrower, and the incurrence of any Indebtedness by any Loan Party in connection therewith, had occurred immediately prior to be caused thereby such day) is less than 1.00 to 1. From and after the last day of any Rolling Period (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (beginning with the Rolling Period ended immediately prior to the extent necessary December 2002 Amendment Effective Date) for which the ratio of Consolidated Total Indebtedness to pay interest onConsolidated EBITDA as of the last day of any such Rolling Period (calculated on a pro forma basis as if such repurchase of Capital Stock of the Borrower, and the incurrence of any Indebtedness by any Loan Party in connection therewith, had occurred immediately prior to such day) is 1.00 to 1 or redeemgreater (such day, the TIDES Debentures or "Limitation Date"), the Borrower shall be subject to cover operating expenses a limitation of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees and former employees so long as $15,000,000 in the aggregate amount of for all such repurchases since of Capital Stock (the Closing Date does "Limitation") from and after the Limitation Date. The Limitation described previously shall not exceed be applicable during any subsequent Rolling Period in which the ratio described herein for such Rolling Period is less than 1.00 to 1. For any subsequent Rolling Period in which the ratio described herein for such Rolling Period is 1.00 to 1 or greater, the Limitation shall again be $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as 15,000,000 in the aggregate amount of all from and after any such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentsubsequent Rolling Period."

Limitation on Dividends. Declare The Borrower shall not, and shall not permit any of its Subsidiaries to, (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of such Personthe Borrower or its Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person the Borrower or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or a limited liability company, make any distribution with respect to the ownership interests therein, or, in either case, any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings the Borrower or any Subsidiary of Holdings(such declarations, except payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"); provided, however, that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries from and including November 1, 2002 to but excluding the Revolving Loan Commitment Expiration Date, the Borrower shall be permitted to make payments on account of, and set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest onany shares of its common stock, or redeemany warrants or options to purchase its common stock, not exceeding $20,000,000 in the TIDES Debentures aggregate, so long as no Default has occurred and is continuing or to cover operating expenses would be caused by any of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trustforegoing, (ii) Holdings may repurchase or redeem shares of Holdings common stock from the Borrower and its employees and former employees Subsidiaries shall be permitted to make other Restricted Payments so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, no Default has occurred and is continuing or would be caused thereby and (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000Subsidiaries shall in any case be permitted to pay cash dividends and other distributions, (iv) Holdings may declare directly or pay dividends on and make mandatory stock repurchases (pursuant indirectly, to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentBorrower.

Limitation on Dividends. Declare If (1) there shall have occurred any event of which the Corporation has actual knowledge that (a) is a Default or an Event of Default and (b) in respect of which the Corporation shall not have taken reasonable steps to cure, (2) if the Securities are held by the Property Trustee, the Corporation shall be in default with respect to its payment of any obligations under the Capital Securities Guarantee or (3) the Corporation shall have given notice of its election to exercise its right to commence an Extended Interest Payment Period and shall not have rescinded such notice, and such Extended Interest Payment Period or any extension thereof shall have commenced and be continuing, the Corporation will not (i) declare or pay any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings or any Subsidiary of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustCorporation's capital stock, (ii) Holdings may repurchase make any payment of principal of or redeem shares of Holdings common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stockpremium, if any, or interest on or repay, repurchase or redeem any debt securities of the Corporation (including Other Debentures) that rank pari passu with or junior in right of payment to the Securities or (iii) make any guarantee payments with respect to any guarantee (other than the Capital Securities Guarantee) by the Corporation of the debt securities of any Subsidiary of the Corporation (including Other Guarantees) if such guarantee ranks pari passu with or junior in right of payment to the Securities (other than (a) dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, Common Stock), (b) any declaration of a dividend in connection with the implementation of a stockholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, (c) as a result of a reclassification of the Corporation's capital stock or the exchange or conversion of one class or series of the Corporation's capital stock for another class or series of the Corporation's capital stock, (d) the purchase of fractional interests in shares of the Corporation's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged and (ve) Holdings may declare purchases of Common Stock related to the issuance of Common Stock or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% rights under any of the Consolidated Net Income of Holdings Corporation's benefit or compensation plans for the period (taken as one accounting period) from the beginning its directors, officers or employees or any of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentCorporation's dividend reinvestment plans).

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings HCC or any Subsidiary of HoldingsHCC, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings HCC may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) HCC and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustSubsidiaries, (ii) Holdings HCC may repurchase or redeem shares of Holdings HCC common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Initial Closing Date does not exceed $7,500,000, (iii) Holdings HCC may make open market repurchases of shares of Holdings HCC common stock so long as the aggregate amount of all such repurchases since during the Closing Date Term does not exceed $25,000,000, (iv) Holdings HCC may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings HCC may declare or pay dividends on shares of Holdings HCC common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings HCC for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date October 1, 1998 to the end of Holdings' HCC's most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or payment.

Limitation on Dividends. (a) . (a) Declare or pay any dividend (other than dividends payable solely in Convertible Preferred or common stock of such PersonMerisel) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person Merisel, or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Merisel, or (b) enter into any derivative or other transaction with any financial institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”) obligating Merisel or any Subsidiary Loan Party to make payments to such Derivatives Counterparty as a result of Holdingsany change in value of any such Capital Stock (such declarations, except payments, setting apart, purchases, redemptions, defeasances, retirements, acquisitions and distributions, and such transactions with any Derivatives Counterparties, being herein called “Restricted Payments”). Notwithstanding the foregoing clause (a), Merisel, at any time on or after the Restatement Effective Date, may effect one or more transactions that if together shall cause Merisel to no longer be a reporting company under Sections 12 or 15 of the Exchange Act (the “Stock Repurchase Transactions”); provided, that (x) any payments, expenses or fees in connection with the Stock Repurchase Transactions shall not exceed $2,500,000.00 in the aggregate, (y) immediately before and after giving effect to the Stock Repurchase Transactions, (i) no Default or Event of Default exists or would reasonably shall have occurred and be expected to be caused thereby (i) Subsidiaries of Holdings may declare continuing and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) Holdings may repurchase or redeem shares of Holdings common stock from its employees Borrowers and former employees so long as each Corporate Guarantor are in compliance with the aggregate amount of all such repurchases since covenants set forth in Section 9.1 recomputed for the Closing Date does not exceed $7,500,000, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make mandatory stock repurchases (pursuant most recently ended quarter for which information is available but giving effect to the Stock Repurchase Transactions and are in compliance with all other terms and conditions of the applicable certificate of designation) of its preferred stock, if anythis Agreement, and (vz) Holdings may declare or pay dividends on shares Merisel shall be eligible to file, and shall file, notices with the Securities and Exchange Commission of Holdings common stock, provided that its withdrawal from reporting company status within nine (9) months from the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% date of the Consolidated Net Income adoption of Holdings for a plan by the period Board of Directors of Merisel through board resolutions to become a non-reporting company; provided further that no later than ten (taken as one accounting period10) from calendar days after Merisel becomes a non-reporting company under the beginning Exchange Act the Loan Parties shall provide the Lender with evidence of the first fiscal quarter commencing after transition to non-reporting status along with evidence of consummation of the Closing Date to the end Stock Repurchase Transactions including any filings, notices, opinions of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent counsel and the Lenders pursuant to subsection 10.1 at any other documents, agreement or prior to the time of such declaration or paymentinstruments contemplated by and executed in connection therewith.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such PersonPerson or in options, warrants or rights to purchase such common stock) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Hanover or any Subsidiary of HoldingsHanover (collectively, "Restricted Payments"), except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings Hanover may declare and pay dividends to Holdings Hanover (to the extent necessary to pay interest on, or redeem, the TIDES Debentures and any Refinancing Indebtedness incurred in respect thereof or to cover operating expenses of HoldingsHanover) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustTrust and any Refinancing Indebtedness incurred in respect thereof, (ii) Holdings Hanover may repurchase or redeem shares of Holdings Hanover common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Corporate Credit Agreement Closing Date does not exceed $7,500,000, (iii) Holdings Subsidiaries of Hanover may declare and pay dividends, or make open market repurchases of shares of Holdings common stock so long as distributions, to Hanover to the aggregate amount of all such repurchases since extent necessary to allow Hanover to pay scheduled interest on the Closing Date does not exceed $25,000,0002008 Notes and any Refinancing Indebtedness incurred in respect thereof, (iv) Holdings Subsidiaries of Hanover may declare and pay dividends, or pay dividends on and make mandatory stock repurchases (pursuant distributions, to Hanover to the terms extent necessary to allow Hanover to pay interest when due on the Hanover Convertible Notes and any Refinancing Indebtedness incurred in respect thereof, (v) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the applicable certificate of designation) of its preferred stock, if anyextent necessary to allow Hanover to pay interest when due on the 2003 Notes and any Refinancing Indebtedness incurred in respect thereof, and (vvi) Holdings any Subsidiary may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant make Restricted Payments to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentHCLP.

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such PersonPerson or in options, warrants or rights to purchase such common stock) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Hanover or any Subsidiary of HoldingsHanover (collectively, “Restricted Payments”), except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings Hanover may declare and pay dividends to Holdings Hanover (to the extent necessary to pay interest on, or redeem, the TIDES Debentures and any Refinancing Indebtedness incurred in respect thereof or to cover operating expenses of HoldingsHanover) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustTrust and any Refinancing Indebtedness incurred in respect thereof, (ii) Holdings Hanover may repurchase or redeem shares of Holdings Hanover common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, (iii) Holdings Subsidiaries of Hanover may declare and pay dividends, or make open market repurchases of shares of Holdings common stock so long as distributions, to Hanover to the aggregate amount of all such repurchases since extent necessary to allow Hanover to pay scheduled interest on the Closing Date does not exceed $25,000,0002008 Notes and any Refinancing Indebtedness incurred in respect thereof, (iv) Holdings Subsidiaries of Hanover may declare and pay dividends, or pay dividends on and make mandatory stock repurchases (pursuant distributions, to Hanover to the terms extent necessary to allow Hanover to pay interest when due on the Hanover Convertible Notes and any Refinancing Indebtedness incurred in respect thereof, (v) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the applicable certificate of designation) of its preferred stock, if anyextent necessary to allow Hanover to pay interest when due on the 2003 Notes and any Refinancing Indebtedness incurred in respect thereof, and (vvi) Holdings any Subsidiary may declare make Restricted Payments to HCLP or pay dividends on shares to any Subsidiary of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentHCLP.

Limitation on Dividends. Declare Quiksilver shall not, and shall not permit any of its Subsidiaries to, (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of such PersonQuiksilver or its Subsidiaries) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person Quiksilver or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or a limited liability company, make any distribution with respect to the ownership interests therein, or, in either case, any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings Quiksilver or any Subsidiary of Holdings(such declarations, except payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments") provided, however, that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries from and including November 1, 2003 to but excluding the Revolving Loan Commitment Expiration Date, Quiksilver shall be permitted to make payments on account of, and set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of Holdings may declare and pay dividends to Holdings (to the extent necessary to pay interest onany shares of its common stock, or redeemany warrants or options to purchase its common stock, not exceeding US$20,000,000 in the TIDES Debentures aggregate, so long as no Default has occurred and is continuing or to cover operating expenses would be caused by any of Holdings) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trustforegoing, (ii) Holdings may repurchase or redeem shares of Holdings common stock from Quiksilver and its employees and former employees Subsidiaries shall be permitted to make other Restricted Payments so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000, no Default has occurred and is continuing or would be caused thereby and (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000Subsidiaries shall in any case be permitted to pay cash dividends and other distributions, (iv) Holdings may declare directly or pay dividends on and make mandatory stock repurchases (pursuant indirectly, to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on shares of Holdings common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or paymentQuiksilver.

Limitation on Dividends. Declare or The Borrower will not pay any dividend dividends (other than dividends payable solely in common stock the Capital Stock of such Personthe Borrower) on, or return any capital to its equity holders or make any other distribution, payment on account ofor delivery of property or cash to its equity holders as such, or set apart assets redeem, retire, purchase or otherwise acquire, directly or indirectly, for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition ofconsideration, any shares of any class of its Capital Stock or the Capital Stock of such Person or any warrants or options to purchase any such Stock, whether Parent Entity now or hereafter outstandingoutstanding (or any options or warrants or stock appreciation or similar rights issued with respect to any of its Capital Stock), or make set aside any other distribution funds for any of the foregoing purposes, or permit the Borrower or any of the Restricted Subsidiaries to purchase or otherwise acquire for consideration any shares of any class of the Capital Stock of any Parent Entity of the Borrower or the Capital Stock of the Borrower, now or hereafter outstanding (or any options or warrants or stock appreciation or similar rights issued with respect to any of the Capital Stock of any Parent Entity of the Borrower or the Capital Stock of the Borrower) (all of the foregoing “Dividends”); provided that: (a) (i) the Borrower may (or may pay Dividends to permit any Parent Entity thereof to) redeem in respect thereof, either directly or indirectly, whether in cash or property whole or in obligations part any of Holdings its Capital Stock with proceeds received by the Borrower from substantially concurrent equity contributions or issuances of new shares of its Capital Stock; provided that any terms and provisions material to the interests of the Lenders, when taken as a whole, contained in such other class of Capital Stock are at least as advantageous to the Lenders as those contained in the Capital Stock redeemed thereby and (ii) the Borrower and any Restricted Subsidiary may pay Dividends payable solely in the Capital Stock (other than Disqualified Capital Stock not otherwise permitted by Section 10.1) of Holdings, except that if such Person; (b) so long as no Default or Event of Default exists has occurred, is continuing or would reasonably be expected to be caused thereby result therefrom, the Borrower may redeem, acquire, retire or repurchase (i) Subsidiaries of Holdings and the Borrower may declare and pay dividends Dividends to Holdings (any Parent Entity thereof, the proceeds of which are used to the extent necessary to pay interest on, or so redeem, the TIDES Debentures acquire, retire or repurchase) shares of its Capital Stock (or any options or warrants or stock appreciation or similar rights issued with respect to any of such Capital Stock) (or to cover operating expenses allow any of Holdingsthe Borrower’s Parent Entities to so redeem, retire, acquire or repurchase their Capital Stock (or any options or warrants or stock appreciation or similar rights issued with respect to any of its Capital Stock)) held by current or former officers, managers, consultants, directors and other shareholders employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of such Subsidiaries any Parent Entity of the Borrower, the Borrower and the TIDES Trust may redeem Restricted Subsidiaries, with the TIDES as contemplated by proceeds of Dividends from, the TIDES Declaration Borrower, upon the death, disability, retirement or termination of Trustemployment of any such Person or otherwise in accordance with any stock option or stock appreciation or similar rights plan, (ii) Holdings may repurchase any management, director and/or employee stock ownership or redeem shares of Holdings common incentive plan, stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $7,500,000subscription plan, (iii) Holdings may make open market repurchases of shares of Holdings common stock so long as the aggregate amount of all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare employment termination agreement or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare any other employment agreements or pay dividends on shares of Holdings common stock, equity holders’ agreement; provided that the aggregate amount of all cash paid in respect of all such declarations shares of Capital Stock (or any options or warrants or stock appreciation or similar rights issued with respect to any of such Capital Stock) so redeemed, acquired, retired or repurchased in any calendar year does not exceed the sum of (i) $5,000,000 plus (ii) all Net Cash Proceeds obtained by the Borrower during such calendar year from the sale of such Capital Stock to other present or former officers, consultants, employees and directors in connection with any permitted compensation and incentive arrangements plus (iii) all net cash proceeds obtained from any key-man life insurance policies received during such calendar year; notwithstanding the foregoing, 100% of the unused amount of payments in respect of this Section 10.6(b)(i)) (before giving effect to any carry forward) may be carried forward without duplication to the two immediately succeeding fiscal years (but not any other) and utilized to make payments pursuant to this clause Section 10.6(b)) (v) above does not exceed 25% of any amount so carried forward shall be deemed to be used last in the Consolidated Net Income of Holdings for the period (taken as one accounting period) from the beginning of the first subsequent fiscal quarter commencing after the Closing Date to the end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or payment.year);

Limitation on Dividends. Declare or pay any dividend (other than dividends payable solely in common stock of such Person) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings HCC or any Subsidiary of HoldingsHCC, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) Subsidiaries of Holdings HCC may declare and pay dividends to Holdings (to the extent necessary to pay interest on, or redeem, the TIDES Debentures or to cover operating expenses of Holdings) HCC and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of TrustSubsidiaries, (ii) Holdings HCC may repurchase or redeem shares of Holdings HCC common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the Initial Closing Date does not exceed $7,500,000, (iii) Holdings HCC may make open market repurchases of shares of Holdings HCC common stock so long as the aggregate amount of all such repurchases since during the Closing Date Term does not exceed $25,000,000, (iv) Holdings HCC may declare or pay dividends on and make mandatory stock repurchases (pursuant to the terms of the applicable certificate of designation) of its preferred stock, if any, and (v) Holdings HCC may declare or pay dividends on shares of Holdings HCC common stock, provided that the aggregate amount of such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of Holdings HCC for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Initial Closing Date to the end of Holdings' HCC's most recently ended fiscal quarter for which financial statements have been delivered to the Agent and the Lenders pursuant to subsection 10.1 at or prior to the time of such declaration or payment.