Common use of Permitted Distribution Clause in Contracts

Permitted Distribution. (a) The Company shall be entitled to distribute to the Shareholders prior to or at the Closing an amount of cash (the "Permitted Distribution of 1999 Earnings") equal to the earnings from the ordinary operations of the Company, as calculated consistently with prior years without any change in accounting principles (except as required by the use of the percentage of completion method of accounting), for the period from January 1, 1999 through the end of the last full calendar month's operations ending prior to the Closing Date; provided, however, that if the Purchasers extend the Closing to a date after June 15, 1999 as permitted by Section 4.1, the Permitted Distribution of 1999 Earnings shall be calculated and distributed for the period from January 1, 1999 through the Closing Date as so extended. Should the cash of the Company at Closing (after withdrawal of cash in the amount of the Owner's Adjustment pursuant to the Adjusted December 31, 1998 Balance Sheet) be less than the Permitted Distribution of 1999 Earnings, as calculated pursuant to Appendix 3.3(a) (any such difference being referred to herein as the "Cash Distribution Shortfall"), the cash portion of the Purchase Price shall be increased by an amount equal to the Cash Distribution Shortfall; provided, that to the extent the Cash Distribution Shortfall exceeds one million dollars ($1,000,000), such excess shall not be paid in cash at Closing, but rather shall be reflected by four new promissory notes of Purchaser (the "Additional Notes"), each in an amount equal to one-fourth of the excess of the Cash Distribution Shortfall over one million dollars ($1,000,000). The Additional Notes will be on the same terms and conditions as the Notes, except that the maturity date shall be thirteen (13) months from the date of issue. In the event that the Adjusted Net Book Value is less than $5,805,000, the cash consideration payable at the Closing shall be reduced as provided in Section 3.3, and nothing in this Section 7.8 is intended to obviate or vitiate the necessity of making such reduction. (b) At the Closing, the Company shall deliver to Purchaser a certificate, signed by each of the Shareholders, stating that the Permitted Distribution of 1999 Earnings has been calculated in compliance with the Analysis of Adjustments, and setting forth in reasonable detail the calculations forming the basis for such statement. (c) The Company shall not terminate its Subchapter S election prior to the Closing Date. The Company and the Shareholders shall be responsible for paying federal, state and local income taxes on the Permitted Distribution of 1999 Earnings.

Permitted Distribution. any Distribution made by a Non-Obligor Subsidiary to another Non-Obligor Subsidiary or an Obligor; (ab) The Company any Distribution made by a Foreign Obligor to another Obligor; (c) any Distribution made in cash by any Obligor if the following conditions are satisfied: (i) no Default or Event of Default has occurred or would result from such Distribution, (ii) Average Availability for the 60 day period immediately preceding such Distribution calculated on a pro forma basis assuming such Distribution occurred on the first day of such period (including any Loans made hereunder to finance such Distribution) shall be entitled to distribute to the Shareholders prior to greater than or at the Closing an amount of cash (the "Permitted Distribution of 1999 Earnings") equal to the earnings from the ordinary operations greater of (A) 25% of the Companyaggregate Commitments and (B) $11,500,000, as calculated consistently with prior years without any change in accounting principles (except as required by iii) Availability, on the use date of the percentage of completion method of accounting)such Distribution, for the period from January 1, 1999 through the end of the last full calendar month's operations ending prior immediately after giving effect to the Closing Date; provided, however, that if the Purchasers extend the Closing consummation of such Distribution (including any Loans made hereunder to a date after June 15, 1999 as permitted by Section 4.1, the Permitted Distribution of 1999 Earnings finance such Distribution) shall be calculated and distributed for the period from January 1, 1999 through the Closing Date as so extended. Should the cash of the Company at Closing (after withdrawal of cash in the amount of the Owner's Adjustment pursuant to the Adjusted December 31, 1998 Balance Sheet) be less greater than the Permitted Distribution of 1999 Earnings, as calculated pursuant to Appendix 3.3(a) (any such difference being referred to herein as the "Cash Distribution Shortfall"), the cash portion of the Purchase Price shall be increased by an amount or equal to the Cash Distribution Shortfallgreater of (A) 25% of the aggregate Commitments and (B) $11,500,000, (iv) Borrowers provide Agent evidence that after giving effect to the consummation of such Distribution, Borrowers and their Subsidiaries on a consolidated basis are in compliance with the financial covenant set forth in Section 10.3 on a pro forma basis; provided, that such financial covenant shall be measured as of the most recently ended fiscal month for which Obligors have delivered the financial statements required under Section 10.1.2(a) or (b), as the case may be, for the twelve fiscal month period then ended, and (v) each Obligor and each Guarantor shall be Solvent before and after giving effect to such Distribution; and (d) following December 31, 2020, Distributions on account of redemptions of Equity Interests of Holdings held by employees, officers, or directors of Holdings (or any spouses, ex-spouses, estates or Affiliates of any of the foregoing); provided, that the aggregate amount of such redemptions made by Holdings in respect of each Fiscal Year prior to the extent Revolver Termination Date shall not exceed the Cash Distribution Shortfall exceeds one million dollars greater of (i) $1,000,0002,000,000 or (ii) 5% of EBITDA for the four Fiscal Quarter period most recently ended as of such date of determination in respect of which financial statements have been (or were required to be) delivered pursuant to Section 10.1.2(a) or (b), such excess shall not be paid in cash at Closingas applicable; provided, but rather further, that Distributions under this clause (d) shall be reflected by four new promissory notes subject to satisfaction of Purchaser the following conditions: (i) no Default or Event of Default has occurred or would result from such Distribution, (ii) Average Availability for the "Additional Notes"), each in an amount 60 day period immediately preceding such Distribution calculated on a pro forma basis assuming such Distribution occurred on the first day of such period (including any Loans made hereunder to finance such Distribution) shall be greater than or equal to one-fourth the greater of (A) 25% of the excess of the Cash Distribution Shortfall over one million dollars aggregate Commitments and (B) $1,000,000). The Additional Notes will be 11,500,000, (iii) Availability, on the same terms and conditions as the Notes, except that the maturity date shall be thirteen (13) months from the date of issue. In such Distribution, immediately after giving effect to the event that the Adjusted Net Book Value is less than $5,805,000, the cash consideration payable at the Closing consummation of such Distribution (including any Loans made hereunder to finance such Distribution) shall be reduced as provided in Section 3.3, and nothing in this Section 7.8 is intended greater than or equal to obviate or vitiate the necessity greater of making such reduction. (bA) At the Closing, the Company shall deliver to Purchaser a certificate, signed by each 25% of the Shareholdersaggregate Commitments and (B) $11,500,000, stating (iv) Borrowers provide Agent evidence that after giving effect to the Permitted Distribution consummation of 1999 Earnings has been calculated such Distribution, Borrowers and their Subsidiaries on a consolidated basis are in compliance with the Analysis financial covenant set forth in Section 10.3 on a pro forma basis; provided, that such financial covenant shall be measured as of Adjustmentsthe most recently ended fiscal month for which Obligors have delivered the financial statements required under Section 10.1.2(a) or (b), as the case may be, for the twelve fiscal month period then ended, and setting forth in reasonable detail the calculations forming the basis for such statement. (cv) The Company shall not terminate its Subchapter S election prior to the Closing Date. The Company each Obligor and the Shareholders each Guarantor shall be responsible for paying federal, state Solvent before and local income taxes on the Permitted Distribution of 1999 Earningsafter giving effect to such Distribution.