Common use of Limitation on Dividends Clause in Contracts

Limitation on Dividends. 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 the 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 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its Subsidiariessuch 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 the Borrower or its Subsidiaries such Person 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 the Borrower Holdings or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) any Subsidiary Subsidiaries of Holdings may declare and pay dividends to Holdings (other than WTAC) may make Restricted Payments to the Borrower extent necessary to pay interest on, or redeem, the TIDES Debentures or to any cover operating expenses of Holdings) and other Wholly Owned Subsidiary shareholders of such Subsidiaries and the Borrower and TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) commencing February 1Holdings 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, 2004, the Borrower (iii) Holdings may make Restricted Payments to CCI for open market repurchases of shares of Holdings common stock so long as the purpose aggregate amount of permitting CCI to all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make regularly scheduled payments of interest on the CCI Notes as required mandatory stock repurchases (pursuant to the terms of the CCI Indenture as in effect applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on the Closing Date; shares of Holdings common stock, 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 all Restricted Payments made on 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 shall not exceed an amount equal to the difference between (x) end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Cumulative Credit and (y) 1.4 times Cumulative Interest Expense (Agent and the Agent shall have received a certificate Lenders pursuant to subsection 10.1 at or prior to the time 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 Maximum Total Debt Ratio equals declaration or exceeds 5.50 to 1.00payment.

Limitation on Dividends. The Borrower Quiksilver shall not, and shall not permit any of its Subsidiaries to to, (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of the Borrower Quiksilver 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 the Borrower 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 the Borrower Quiksilver or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")) provided, except however, that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower from and (ii) commencing February including November 1, 20042003 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 Borrower may make Restricted Payments purchase, redemption, defeasance, retirement or other acquisition of any shares of its common stock, or any warrants or options to CCI for purchase its common stock, not exceeding US$20,000,000 in the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes aggregate, so long as required pursuant to the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 be caused by any of the Borrower setting forth calculations supporting the condition described in this clause (y) and (C) with respect to clause foregoing, (ii) above, no such Restricted Payment Quiksilver and its Subsidiaries shall be permitted during to make other Restricted Payments so long as no Default has occurred and is continuing or would be caused thereby and (iii) the Subsidiaries shall in any period in which the Maximum Total Debt Ratio equals case be permitted to pay cash dividends and other distributions, directly or exceeds 5.50 indirectly, to 1.00Quiksilver.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its SubsidiariesPerson making such dividend) 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 the Borrower Company or any of 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 the Borrower Company or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasancedefeasances, retirements, acquisitions and distributions being herein called "Restricted PaymentsRESTRICTED PAYMENTS"), except that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower Company or to any other Wholly Owned wholly owned Subsidiary of the Borrower Company and so long as, on the date of such Restricted Payment, both before and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing (iia) commencing February 1, 2004, the Borrower Company may make Restricted Payments to CCI for Holdings to service the purpose of permitting CCI to make regularly scheduled payments of interest on Seller Note, the CCI Notes as required pursuant to Westinghouse Debt, the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the difference between (x) the Cumulative Credit and (y) 1.4 times Cumulative Interest Expense (CPCFA Debt 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 Tooele County Debt, PROVIDED that (yi) and (C) with respect to clause (ii) above, no each such Restricted Payment shall be made on the date on which a cash payment of interest under the Seller Note or of principal or interest under the Westinghouse Debt, the CPCFA Debt or the Tooele County Debt, as the case may be, is due and shall be in an amount not greater than the amount of such cash payment, and such cash payment in respect of such Indebtedness shall be made by Holdings on such date and (b) the Company may make Restricted Payments to Holdings to provide for payment in the ordinary course of business of taxes, directors' fees, stock exchange fees, and other costs and expenses of its operations as a public company permitted during any period in which by the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00Guarantee and Collateral Agreement.

Limitation on Dividends. The Borrower shall not, and shall will not permit any of its Subsidiaries to (a) if a corporation, declare or pay any dividend dividends (other than dividends payable solely in common stock the Capital Stock of the Borrower Borrower) or return any capital to its Subsidiaries) on, 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 any Parent Entity now or hereafter outstanding (or any options or warrants or stock appreciation or similar rights issued with respect to any of its Capital Stock), or set aside any 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 or its Subsidiaries or any warrants or options to purchase any such Capital StockBorrower, whether now or hereafter outstanding, and outstanding (b) if a partnership or a limited liability company, make any distribution options or warrants or stock appreciation or similar rights issued with respect to any of the ownership interests therein, or, in either case, Capital Stock of any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations Parent Entity of the Borrower or any Subsidiary the Capital Stock of the Borrower) (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"all of the foregoing “Dividends”), except that ; provided that: (a) (i) the Borrower may (or may pay Dividends to permit any Subsidiary (other than WTACParent Entity thereof to) may make Restricted Payments redeem in whole or in part any of 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 Borrower or to any other Wholly Owned Subsidiary interests of the Borrower 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) commencing February 1, 2004, the Borrower and any Restricted Subsidiary may make Restricted Payments to CCI for pay Dividends payable solely in the purpose Capital Stock (other than Disqualified Capital Stock not otherwise permitted by Section 10.1) of permitting CCI to make regularly scheduled payments of interest on the CCI Notes such Person; (b) so long as required pursuant to the terms of the CCI Indenture as in effect on the Closing Date; provided that in each case (A) no Default or Event of Default has occurred and occurred, is continuing or would result from therefrom, the making Borrower may redeem, acquire, retire or repurchase (and the Borrower may declare and pay Dividends to any Parent Entity thereof, the proceeds of which are used to so redeem, 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 allow any of the 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 employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of any Parent Entity of the Borrower, the Borrower and the Restricted PaymentSubsidiaries, (B) with the proceeds of Dividends from, the Borrower, upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation or similar rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement; provided that the aggregate amount of all Restricted Payments made on cash paid in respect of all such shares of Capital Stock (or after the Closing Date shall not exceed an amount equal to the 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) any options or warrants or stock appreciation or similar rights issued with respect to clause 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) aboveall Net Cash Proceeds obtained by the Borrower during such calendar year from the sale of such Capital Stock to other present or former officers, no 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 Restricted Payment 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 Section 10.6(b)) (any amount so carried forward shall be permitted during any period deemed to be used last in which the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00.subsequent fiscal year);

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other ------------------------------ than dividends payable solely in common stock of the Borrower or its Subsidiariessuch 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 the Borrower or its Subsidiaries such Person 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 the Borrower Holdings or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) any Subsidiary Subsidiaries of Holdings may declare and pay dividends to Holdings (other than WTAC) may make Restricted Payments to the Borrower extent necessary to pay interest on, or redeem, the TIDES Debentures or to any cover operating expenses of Holdings) and other Wholly Owned Subsidiary shareholders of such Subsidiaries and the Borrower and TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) commencing February 1Holdings 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, 2004, the Borrower (iii) Holdings may make Restricted Payments to CCI for open market repurchases of shares of Holdings common stock so long as the purpose aggregate amount of permitting CCI to all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make regularly scheduled payments of interest on the CCI Notes as required mandatory stock repurchases (pursuant to the terms of the CCI Indenture applicable certificate of designation) of its preferred stock, if any, (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 in effect on one accounting period) from the beginning of the first fiscal quarter commencing after the Closing Date; provided that 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 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 each case favor of the sellers of the KCC Group Limited so long as (A) no Default has occurred and is continuing or would result from the making of such Restricted Payment, (B) the aggregate amount of all Restricted Payments made on such declarations, payments or after the Closing Date shall not exceed an amount equal distributions pursuant to the 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 (yvi) does not exceed (Pounds)6,000,000 (UK) plus accrued interest thereon and (CB) with respect to clause (ii) above, no such Restricted Payment shall dividend may be permitted during any period in which paid more than three Business Days prior to the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00date the equivalent payment is made on such notes.

Limitation on Dividends. The Borrower shall not, and shall will not permit any of its Subsidiaries to (a) if a corporation, declare or pay any dividend dividends (other than dividends payable solely in common its capital stock of the Borrower or rights, warrants or options to purchase its Subsidiariescapital stock) on, or return any capital to its stockholders or make any other distribution, payment on account ofor delivery of property or cash to its stockholders 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 Capital Stock its capital stock or the capital stock of any direct or indirect parent of the Borrower now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of such shares), or set aside any funds for any of the foregoing purposes, or permit any of the Restricted Subsidiaries to purchase or otherwise acquire for consideration (other than in connection with an investment permitted by Section 10.5) any shares of any class of the capital stock of the Borrower, now or hereafter outstanding (or any options or warrants or stock appreciation rights issued by such Person with respect to its capital stock) (all of the foregoing “Dividends”), provided that, so long as no Default or Event of Default exists or would exist after giving effect thereto, (a) the Borrower may pay regularly scheduled dividends on Permitted Preferred Stock, (b) the Borrower may redeem in whole or in part any capital stock of the Borrower for another class of capital stock or rights to acquire capital stock of the Borrower or its Subsidiaries with proceeds from substantially concurrent equity contributions or any warrants or options to purchase any issuances of new shares of capital stock, provided that such Capital Stock, whether now or hereafter outstanding, other class of capital stock contains terms and (b) if a partnership or a limited liability company, make any distribution with respect provisions at least as advantageous to the ownership interests thereinLenders as those contained in the capital stock redeemed thereby, or, in either case, any other distribution (c) the Borrower may repurchase shares of its capital stock (and/or options or warrants in respect thereof) held by its officers, either directly directors and employees so long as such repurchase is pursuant to, and in accordance with the terms of, management and/or employee stock plans, stock subscription agreements or indirectlyshareholder agreements, whether in cash or property or in obligations of the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that (id) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for investments permitted by Section 10.5 and (e) the purpose of permitting CCI to make regularly scheduled payments of interest Borrower may declare and pay dividends on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on the Closing Date; its capital stock, provided that in each case (A) no Default has occurred and is continuing or would result from the making of such Restricted Payment, (Bi) the aggregate amount of all Restricted Payments made on or after the Closing Date shall not exceed an amount equal dividends paid pursuant to the 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 (ye) shall not at any time exceed 50% of Cumulative Consolidated Net Income Available to Common Stockholders at such time and (C) with respect to clause (ii) aboveat the time of the payment of any such dividends and after giving effect thereto, no the Consolidated Total Debt to Consolidated Total Capitalization Ratio on the date of such Restricted Payment payment of such dividends shall be permitted during any period in which the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00less than 0.35:1.00.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to to, (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of the 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 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"); provided, except however, that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower from and (ii) commencing February including November 1, 20042002 to but excluding the Revolving Loan Commitment Expiration Date, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI shall be permitted to make regularly scheduled 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 interest on any shares of its common stock, or any warrants or options to purchase its common stock, not exceeding $20,000,000 in the CCI Notes aggregate, so long as required pursuant to the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 be caused by any of the Borrower setting forth calculations supporting the condition described in this clause (y) and (C) with respect to clause foregoing, (ii) above, no such Restricted Payment the Borrower and its Subsidiaries shall be permitted during to make other Restricted Payments so long as no Default has occurred and is continuing or would be caused thereby and (iii) the Subsidiaries shall in any period in which case be permitted to pay cash dividends and other distributions, directly or indirectly, to the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00Borrower.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other ----------------------- than dividends payable solely in common stock of the Borrower or its Subsidiariessuch 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 the Borrower or its Subsidiaries such Person 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 the Borrower Holdings or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")of Holdings, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) any Subsidiary Subsidiaries of Holdings may declare and pay dividends to Holdings (other than WTAC) may make Restricted Payments to the Borrower extent necessary to pay interest on, or redeem, the TIDES Debentures or to any cover operating expenses of Holdings) and other Wholly Owned Subsidiary shareholders of such Subsidiaries and the Borrower and TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) commencing February 1Holdings 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, 2004, the Borrower (iii) Holdings may make Restricted Payments to CCI for open market repurchases of shares of Holdings common stock so long as the purpose aggregate amount of permitting CCI to all such repurchases since the Closing Date does not exceed $25,000,000, (iv) Holdings may declare or pay dividends on and make regularly scheduled payments of interest on the CCI Notes as required mandatory stock repurchases (pursuant to the terms of the CCI Indenture as in effect applicable certificate of designation) of its preferred stock, if any, and (v) Holdings may declare or pay dividends on the Closing Date; shares of Holdings common stock, 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 all Restricted Payments made on 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 shall not exceed an amount equal to the difference between (x) end of Holdings' most recently ended fiscal quarter for which financial statements have been delivered to the Cumulative Credit and (y) 1.4 times Cumulative Interest Expense (Administrative Agent and the Agent shall have received a certificate Lenders pursuant to subsection 7.1 at or prior to the time 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 Maximum Total Debt Ratio equals declaration or exceeds 5.50 to 1.00payment.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its SubsidiariesBorrower) 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 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasancedefeasances, retirements, acquisitions and distributions being herein called "Restricted Payments"). Notwithstanding the foregoing, except that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004however, the Borrower may make Restricted Payments to CCI for repurchase the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 Capital Stock of the Borrower setting forth calculations supporting pursuant to any currently existing or subsequently adopted stock repurchase program without any limitation, provided, that the condition described 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 such repurchase of Capital Stock of the Borrower, and the incurrence of any Indebtedness by any Loan Party in this clause connection therewith, had occurred immediately prior to such day) is less than 1.00 to 1. From and after the last day of any Rolling Period (ybeginning with the Rolling Period ended immediately prior to the December 2002 Amendment Effective Date) for which the ratio of Consolidated Total Indebtedness to Consolidated 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 greater (C) with respect to clause (ii) abovesuch day, no such Restricted Payment the "Limitation Date"), the Borrower shall be permitted subject to a limitation of $15,000,000 in the aggregate for all such repurchases of Capital Stock (the "Limitation") from and after the Limitation Date. The Limitation described previously shall not be applicable during any period subsequent Rolling Period in which the Maximum Total Debt Ratio equals 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 exceeds 5.50 to 1.00greater, the Limitation shall again be $15,000,000 in the aggregate from and after any such subsequent Rolling Period."

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the 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 capital stock of the Borrower or its Subsidiaries or any warrants or options to purchase any such Capital Stockstock, 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")Subsidiary, except that for (ia)(i) any Subsidiary (other than WTAC) may make Restricted Payments to payment by the Borrower or of amounts then owing to any other Wholly Owned Subsidiary management personnel of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of their respective employment contracts or under any employee benefit plan, (ii)mandatory purchases by the CCI Indenture as 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 effect on an amount not to exceed $35,000,000 in the Closing Date; provided that aggregate and (iv) the purchase, redemption or retirement of any shares of any capital stock of the Borrower or options to purchase capital stock of the Borrower in each case connection with the exercise of outstanding stock options, (Ab) if no Default or Event of Default has occurred and is continuing (or would result from occur and be continuing after giving effect thereto) when any such dividend is declared by the making Board of Directors of the Borrower or such Restricted Payment, (B) the aggregate amount of all Restricted Payments payment is made on the account of the purchase of capital stock of the Borrower, cash dividends on the Borrower's capital stock or after such payments made on the Closing Date shall account of the purchase of capital stock of the Borrower not exceed to exceed, in the aggregate, in any fiscal quarter (the "Payment Quarter") an amount equal to the difference between greater of (xi) the Cumulative Credit $25,000,000 and (yii) 1.4 times Cumulative Interest Expense (and A) 50% (100% if the Agent Borrower shall have received a certificate attained Investment Grade Status) of a Responsible Officer Consolidated Net Income of the Borrower setting forth calculations supporting and its consolidated Subsidiaries for the condition described period of four consecutive fiscal quarters ended immediately prior to the Payment Quarter (such period of four quarters being the "Calculation Period" in this clause respect of such Payment Quarter), less (yB) the cash amount of all (I) dividends paid and redemptions made by the Borrower during such Calculation Period in respect of capital stock and (CII) with respect payments made on the account of the purchase of capital stock of the Borrower during such Calculation Period, but only to clause the extent permitted by the terms of the outstanding Subordinated Debt, and (iic) abovedividends or distributions in the form of additional shares of such capital stock or in options, no such Restricted Payment shall be permitted during any period in which the Maximum Total Debt Ratio equals warrants or exceeds 5.50 other rights to 1.00purchase capital stock.

Limitation on Dividends. PATRONAGE REFUNDS AN& OTHER CASH DISTRIBUTIONS: The Borrower shall Mortgagor will not, and shall not permit in any Calendar Year, without the approval in writing of its Subsidiaries to (a) if a corporationthe Mortgagee, declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its Subsidiaries) onpay or determine to pay any patronage refunds, or retire any patronage capital or make any payment on account ofother cash distributions (such dividends, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasancerefunds, retirement or and other acquisition of, any shares of any class of Capital Stock of 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein hereinafter collectively called "Restricted Paymentsdistributions"), except 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 (i) in any Subsidiary (other than WTAC) event the Mortgagor may make Restricted Payments distributions to estates of deceased patrons to the Borrower extent required or permitted by its articles of incorporation and bylaws, and, if such distributions to such estates do not exceed 25% of the patronage capital and margins received by the Mortgagor in the next preceding year, make such additional distributions in any year as will not cause the total distributions in such year to exceed 25% of the 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 other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004such distribution, the Borrower may make Restricted Payments to CCI for Mortgagor's total current and accrued assets would be less than its total current and accrued liabilities. For the purpose of permitting CCI this section a "cash distribution" shall be deemed to make regularly scheduled payments include any general cancellation or abatement of interest on charges far electric energy or services furnished by the CCI Notes as required pursuant to Mortgagor, but not the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the difference between (x) the Cumulative Credit and (y) 1.4 times Cumulative Interest Expense (and the Agent shall have received a certificate repayment of a Responsible Officer membership fee upon termination of a membership and not the Borrower setting forth calculations supporting rebate of an abatement of costs incurred by the condition described in this clause (y) and (C) with respect to clause (ii) aboveMortgagor, no such Restricted Payment shall be permitted during any period in which the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00as a reduction of wholesale power cost previously incurred.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of a Holding Company, the Borrower or its Subsidiariesa 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 the Borrower or any of its Subsidiaries or Holding Companies 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except or Holding Company; PROVIDED that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower as long as no Default or to any other Wholly Owned Subsidiary Event of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on the Closing Date; provided that in each case (A) no Default has occurred and is continuing or would result therefrom, the Borrower may pay dividends to 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) dividends or distributions payable to the Borrower or any Subsidiary (and, if such Subsidiary has shareholders other than the Borrower or another Subsidiary, to its other shareholders on a PRO RATA basis to such other shareholders), (ii) the payment of dividends by the Borrower or 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 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 Borrower's, Astor II's or Astor Holdings, 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 making Board of Directors of the Borrower, Astor II or Astor Holdings, Inc. (provided that the aggregate price paid for all such Restricted Paymentrepurchased, redeemed, acquired or retired Capital Stock shall not exceed (A) $500,000 in any twelve-month period or (B) $2,000,000 in the aggregate from and after the Closing 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 times necessary to permit payment of (A) amounts payable by Astor Holdings, Inc. under the Management Services Agreement, (B) amounts due under the aggregate amount of all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 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 clause (ii) abovefilings by Astor Holdings, no such Restricted Payment shall be permitted during any period in which Inc. or Astor II with the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00Securities and Exchange Commission.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its Subsidiariessuch 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 the Borrower or its Subsidiaries such Person 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 the Borrower Holdings or any Subsidiary of Holdings (such declarationscollectively, 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) any Subsidiary Subsidiaries of Holdings may declare and pay dividends to Holdings (other than WTAC) may make Restricted Payments to the Borrower extent necessary to pay interest on, or redeem, the TIDES Debentures or to any cover operating expenses of Holdings) and other Wholly Owned Subsidiary shareholders of such Subsidiaries and the Borrower and TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust, (ii) commencing February 1Holdings 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, 2004, the Borrower (iii) Holdings may make Restricted Payments to CCI for open market repurchases of shares of Holdings common stock so long as the purpose aggregate amount of permitting CCI to all such repurchases since the Closing Date does not exceed $75,000,000, (iv) Holdings may declare or pay dividends on and make regularly scheduled payments of interest on the CCI Notes as required mandatory stock repurchases (pursuant to the terms of the CCI Indenture as in effect applicable certificate of designation) of its preferred stock, if any, (v) Holdings may declare or pay dividends on the Closing Date; shares of Holdings common stock, provided that the aggregate amount of such purchases, declarations or payments pursuant to this clause (v) 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 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 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 each case favor of the sellers of the KCC Group Limited so long as (A) no Default has occurred and is continuing or would result from the making of such Restricted Payment, (B) the aggregate amount of all Restricted Payments made on such declarations, payments or after the Closing Date shall not exceed an amount equal distributions pursuant to the 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 (yvi) 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 (Cix) with respect any Subsidiary may make Restricted Payments to clause (ii) above, no such Restricted Payment shall be permitted during Holdings or any period in which the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00Subsidiary.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower such Person or its Subsidiariesin 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 the Borrower or its Subsidiaries such Person 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 the Borrower Hanover or any Subsidiary of Hanover (such declarationscollectively, 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 Hanover may declare and pay dividends to 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 Hanover) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust and any Refinancing Indebtedness incurred in respect thereof, (ii) Hanover may repurchase or redeem shares of 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) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the extent necessary to allow Hanover to pay scheduled interest on the 2008 Notes and any Refinancing Indebtedness incurred in respect thereof, (iv) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the 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 extent necessary to allow Hanover to pay interest when due on the 2003 Notes and any Refinancing Indebtedness incurred in respect thereof, and (vi) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00HCLP.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its SubsidiariesPerson making such dividend) 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 the Borrower Packard or its Subsidiaries any Subsidiary 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 the Borrower Packard or any Subsidiary (such declarationscollectively, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower Packard or to any other Wholly Owned Subsidiary of the Borrower and Guarantor; (ii) commencing February 1, 2004, the Borrower any Foreign Subsidiary may make Restricted Payments to CCI for the purpose any other Subsidiary; and (iii) so long as no Default or Event of permitting CCI to make regularly scheduled payments Default has occurred and is continuing, Packard and any of interest on the CCI Notes as required its Subsidiaries may (A) repurchase shares of its Capital Stock from employees, former employees, directors or former directors of Packard or any of its Subsidiaries pursuant to the terms of the CCI Indenture as in effect on agreements (including employment agreements) or plans (or amendments thereto) approved by the Closing Date; Board of Directors of Packard under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock, 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 all Restricted such repurchases in any calendar year (excluding any such repurchases made through the issuance of Management Notes) (collectively, "Management Stock Payments"), when added to the amount of any Management Note Payments made on or after the Closing Date during such calendar year, shall not exceed an amount equal $2,000,000; and (B) repurchase, redeem or acquire or retire for value any shares of Capital Stock of Packard which were owned immediately prior to the 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 closing of the Borrower setting forth calculations supporting Recapitalization by Non-Management Stockholders (as defined in the condition described in this clause (yRecapitalization Agreement) and (C) with respect which Packard made an offer to clause (ii) aboverepurchase pursuant to Section 2.2 of the Recapitalization Agreement but which were not tendered to Packard, no provided that the purchase price per share for such Restricted Payment shares of Capital Stock of Packard shall be permitted during not exceed $22.25 per share and any period in which such shares of Capital Stock are purchased within 90 days of the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00Closing Date.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its Subsidiariessuch 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 the Borrower or its Subsidiaries such Person 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 the Borrower HCC or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")of HCC, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) any Subsidiary (Subsidiaries of HCC may declare and pay dividends to HCC and other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary shareholders of the Borrower and such Subsidiaries, (ii) commencing February 1HCC may repurchase or redeem shares of 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, 2004, the Borrower (iii) HCC may make Restricted Payments to CCI for open market repurchases of shares of HCC common stock so long as the purpose aggregate amount of permitting CCI to all such repurchases during the Term does not exceed $25,000,000, (iv) HCC may declare or pay dividends on and make regularly scheduled payments of interest on the CCI Notes as required mandatory stock repurchases (pursuant to the terms of the CCI Indenture as in effect applicable certificate of designation) of its preferred stock, if any, and (v) HCC may declare or pay dividends on the Closing Date; shares of HCC common stock, 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 all Restricted Payments made on such declarations or after the Closing Date shall not exceed an amount equal payments pursuant to the 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 (yv) above does not exceed 25% of the Consolidated Net Income of HCC for the period (taken as one accounting period) from the beginning of the fiscal quarter commencing October 1, 1998 to the end of HCC's most recently ended fiscal quarter for which financial statements have been delivered to the Agent and (C) with respect the Lenders pursuant to clause (ii) above, no subsection 10.1 at or prior to the time of such Restricted Payment shall be permitted during any period in which the Maximum Total Debt Ratio equals declaration or exceeds 5.50 to 1.00payment.

Limitation on Dividends. The Borrower shall not, and shall will not permit any of its Subsidiaries to (a) if a corporation, declare or pay any dividend dividends (other than dividends payable solely in common its capital stock of the Borrower or rights, warrants or options to purchase its Subsidiariescapital stock) on, or return any capital to its stockholders or make any other distribution, payment on account ofor delivery of property or cash to its stockholders 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 Capital Stock its capital stock or the capital stock of any direct or indirect parent of the Borrower now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of such shares), or set aside any funds for any of the foregoing purposes, or permit any of the Restricted Subsidiaries to purchase or otherwise acquire for consideration (other than in connection with an investment permitted by Section 10.5) any shares of any class of the capital stock of the Borrower, now or hereafter outstanding (or any options or warrants or stock appreciation rights issued by such Person with respect to its capital stock) (all of the foregoing “Dividends”), provided that, so long as no Default or Event of Default exists or would exist after giving effect thereto, (a) the Borrower may pay regularly scheduled dividends on Permitted Preferred Stock, (b) the Borrower may redeem in whole or in part any capital stock of the Borrower for another class of capital stock or rights to acquire capital stock of the Borrower or its Subsidiaries with proceeds from substantially concurrent equity contributions or any warrants or options to purchase any issuances of new shares of capital stock, provided that such Capital Stock, whether now or hereafter outstanding, other class of capital stock contains terms and (b) if a partnership or a limited liability company, make any distribution with respect provisions at least as advantageous to the ownership interests thereinLenders as those contained in the capital stock redeemed thereby, or, in either case, any other distribution (c) the Borrower may repurchase shares of its capital stock (and/or options or warrants in respect thereof) held by its officers, either directly directors and employees so long as such repurchase is pursuant to, and in accordance with the terms of, management and/or employee stock plans, stock subscription agreements or indirectlyshareholder agreements, whether in cash or property or in obligations of the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that (id) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for investments permitted by Section 10.5 and (e) the purpose Borrower may repurchase or redeem shares of permitting CCI to make regularly scheduled payments of interest its capital stock, or declare and pay dividends on the CCI Notes as required pursuant its capital stock, to the terms extent not otherwise permitted by clauses (a)-(d) of this proviso so long as the CCI Indenture as in effect on the Closing Date; provided that in each case (A) no Default has occurred and Available Commitment is continuing greater than or would result from the making of such Restricted Payment, (B) the aggregate amount of all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00$10,000,000.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower such Person or its Subsidiariesin 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 the Borrower or its Subsidiaries such Person 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 the Borrower Hanover or any Subsidiary of Hanover (such declarationscollectively, 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 Hanover may declare and pay dividends to 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 Hanover) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust and any Refinancing Indebtedness incurred in respect thereof, (ii) Hanover may repurchase or redeem shares of 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) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the extent necessary to allow Hanover to pay scheduled interest on the 2008 Notes and any Refinancing Indebtedness incurred in respect thereof, (iv) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the extent necessary to allow Hanover to pay interest when due on (or, after the conversion of such notes, to the 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 interest 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 Hanover may declare and pay dividends, or 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 (vi) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower HCLP or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00HCLP.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower such Person or its Subsidiariesin 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 the Borrower or its Subsidiaries such Person 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 the Borrower Hanover or any Subsidiary of Hanover (such declarationscollectively, 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 Hanover may declare and pay dividends to 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 Hanover) and other shareholders of such Subsidiaries and the TIDES Trust may redeem the TIDES as contemplated by the TIDES Declaration of Trust and any Refinancing Indebtedness incurred in respect thereof, (ii) Hanover may repurchase or redeem shares of 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) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the extent necessary to allow Hanover to pay scheduled interest on the 2008 Notes and any Refinancing Indebtedness incurred in respect thereof, (iv) Subsidiaries of Hanover may declare and pay dividends, or make distributions, to Hanover to the 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 extent necessary to allow Hanover to pay interest when due on the 2003 Notes and any Refinancing Indebtedness incurred in respect thereof, and (vi) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower HCLP or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on 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 all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00HCLP.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (ai) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of the 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 the Borrower or its Subsidiaries or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, and (bii) 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and Borrower, (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on the Closing DateDate 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 making of such Restricted Payment, Payment and (B) the aggregate amount of all Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the 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 Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its SubsidiariesPerson making such dividend) 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 the Borrower Packard or its Subsidiaries any Subsidiary 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 the Borrower Packard or any Subsidiary (such declarationscollectively, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted PaymentsRESTRICTED PAYMENTS"), except that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower Packard or to any other Wholly Owned Subsidiary of the Borrower and Guarantor, (ii) commencing February 1, 2004, the Borrower any Foreign Subsidiary may make Restricted Payments to CCI for the purpose any other Subsidiary; and (iii) so long as no Default or Event of permitting CCI to make regularly scheduled payments Default has occurred and is continuing, Packard and any of interest on the CCI Notes as required its Subsidiaries may (A) (1) repurchase shares of its Capital Stock from employees, former employees, directors or former directors of Packard or any of its Subsidiaries pursuant to the terms of the CCI Indenture as agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors 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 effect on addition to any other repurchases expressly permitted by the Closing Date; provided that foregoing provisions of this Section 9.6, repurchase shares of its Capital Stock from any Person, PROVIDED, in each case (A) no Default has occurred and is continuing or would result from the making of such Restricted Paymentcase, (B) that the aggregate amount of all Restricted such repurchases in any calendar year (excluding any such repurchases made through the issuance of Management Notes) permitted by clause (1) (collectively, "MANAGEMENT STOCK PAYMENTS") and clause (2) above, when added to the amount of any Management Note Payments made on or after the Closing Date during such calendar year, shall not exceed an amount equal to the difference between (x) the Cumulative Credit $5,000,000 and (yB) 1.4 times Cumulative Interest Expense (and Packard may make cash payments in respect of tax obligations of employees or directors of Packard or any of its Subsidiaries resulting from the Agent shall have received exercise by such Persons of options to purchase common stock of Packard in exchange for a certificate corresponding reduction in the number 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 shares obtainable upon such Restricted Payment shall be permitted during any period in which the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00exercise.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its Subsidiariessuch 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 the Borrower or its Subsidiaries such Person 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 the Borrower HCC or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")of HCC, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) any Subsidiary (Subsidiaries of HCC may declare and pay dividends to HCC and other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary shareholders of the Borrower and such Subsidiaries, (ii) commencing February 1HCC may repurchase or redeem shares of 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, 2004, the Borrower (iii) HCC may make Restricted Payments to CCI for open market repurchases of shares of HCC common stock so long as the purpose aggregate amount of permitting CCI to all such repurchases during the Term does not exceed $25,000,000, (iv) HCC may declare or pay dividends on and make regularly scheduled payments of interest on the CCI Notes as required mandatory stock repurchases (pursuant to the terms of the CCI Indenture as in effect applicable certificate of designation) of its preferred stock, if any, and (v) HCC may declare or pay dividends on the Closing Date; shares of HCC common stock, 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 all Restricted Payments made on such declarations or after the Closing Date shall not exceed an amount equal payments pursuant to the 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 (yv) above does not exceed 25% of the Consolidated Net Income of 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 HCC's most recently ended fiscal quarter for which financial statements have been delivered to the Agent and (C) with respect the Lenders pursuant to clause (ii) above, no subsection 10.1 at or prior to the time of such Restricted Payment shall be permitted during any period in which the Maximum Total Debt Ratio equals declaration or exceeds 5.50 to 1.00payment.

Limitation on Dividends. The Borrower Quiksilver shall not, and shall not permit any of its Subsidiaries to to, (a) if a corporation, declare or pay any dividend (other than dividends payable solely in common stock of the Borrower Quiksilver 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 the Borrower 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 the Borrower Quiksilver or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")) provided, except however, that (i) any Subsidiary (Quiksilver shall be permitted to make payments on account of, and set apart assets for a sinking or other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004analogous fund for, the Borrower may make Restricted Payments purchase, redemption, defeasance, retirement or other acquisition of any shares of its common stock, or any warrants or options to CCI for purchase its common stock, not exceeding US$20,000,000 in the purpose aggregate, so long as no Default or Event of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on the Closing Date; provided that in each case (A) no Default has occurred and is continuing or would result from be caused by any of the making of such Restricted Paymentforegoing, (Bii) the aggregate amount of all Quiksilver and its Subsidiaries shall be permitted to make other Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the difference between so long as (x) after giving pro forma effect thereto, average daily Availability was not less than (x) if the Cumulative Credit and Guarantee Date has not yet occurred, US$25,000,000, or (y) 1.4 times Cumulative Interest Expense (on and after the Agent shall have received a certificate Guarantee Date, US$40,000,000, for any period of a Responsible Officer of thirty consecutive days during the Borrower setting forth calculations supporting 12-month period ending on the condition described in this clause date on which such Restricted Payment is to be made, (y) and (C) with respect the Fixed Charge Coverage Ratio exceeds 1.25 to clause (ii) above, no 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) the Subsidiaries shall in any case be permitted during to pay cash dividends and other distributions, directly or indirectly, to Quiksilver or any period in which Subsidiary, to the Maximum Total Debt Ratio equals extent paid ratably to all stockholders of the Person paying the applicable dividend or exceeds 5.50 to 1.00contribution.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its SubsidiariesBorrower) 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 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 the Borrower or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasancedefeasances, retirements, acquisitions and distributions being herein called "Restricted Payments"). Notwithstanding the foregoing, except that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004however, the Borrower may make Restricted Payments to CCI for repurchase the purpose Capital Stock of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required Borrower pursuant to any currently existing or subsequently adopted stock repurchase program without any limitation, provided, that the terms ratio of Consolidated Senior Indebtedness to Consolidated EBITDA as of the CCI Indenture last day of any 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 effect on connection therewith, had occurred immediately prior to such day) is less than 1.0 to 1.0. From and after the last day of any Rolling Period (beginning with the Rolling Period ended immediately prior to the Closing Date; provided that ) for which the ratio of Consolidated Senior Indebtedness to Consolidated 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 each case connection therewith, had occurred immediately prior to such day) is 1.0 to 1.0 or greater (A) no Default has occurred and is continuing or would result from such day, the making "Limitation Date"), the Borrower shall be subject to a limitation of such Restricted Payment, (B) $15,000,000 in the aggregate amount for all such repurchases of all Restricted Payments made on or Capital Stock (the "Limitation") from and after the Closing Date Limitation Date. The Limitation described previously shall not exceed an amount equal to the 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 applicable during any period subsequent Rolling Period in which the Maximum Total Debt Ratio equals 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 exceeds 5.50 to 1.00greater, the Limitation shall again be $15,000,000 in the aggregate from and after any such subsequent Rolling Period.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its Subsidiariessuch 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 the Borrower or its Subsidiaries such Person 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 the Borrower HCC or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")of HCC, except that if no Default or Event of Default exists or would reasonably be expected to be caused thereby (i) any Subsidiary (Subsidiaries of HCC may declare and pay dividends to HCC and other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary shareholders of the Borrower and such Subsidiaries, (ii) commencing February 1HCC may repurchase or redeem shares of HCC common stock from its employees and former employees so long as the aggregate amount of all such repurchases since the date of this Agreement does not exceed $2,500,000, 2004, the Borrower (iii) HCC may make Restricted Payments to CCI for open market repurchases of shares of HCC common stock so long as the purpose aggregate amount of permitting CCI to all such repurchases during the term of this Agreement does not exceed $25,000,000, (iv) HCC may declare or pay dividends on and make regularly scheduled payments of interest on the CCI Notes as required mandatory stock repurchases (pursuant to the terms of the CCI Indenture as in effect applicable certificate of designation) of its preferred stock, if any, and (v) HCC may declare or pay dividends on the Closing Date; shares of HCC common stock, 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 all Restricted Payments made on such declarations or payments pursuant to this clause (v) above does not exceed 25% of the Consolidated Net Income of HCC 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 difference between (x) end of HCC's most recently ended fiscal quarter for which financial statements have been delivered to the Cumulative Credit and (y) 1.4 times Cumulative Interest Expense (Administrative Agent and the Agent shall have received a certificate Lenders pursuant to subsection 7.1 at or prior to the time 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 Maximum Total Debt Ratio equals declaration or exceeds 5.50 to 1.00payment.

Limitation on Dividends. The Borrower Quiksilver shall not, and shall not permit any of its Subsidiaries to to, (a) if a corporation, declare or pay any dividend (other than dividends payable 97 solely in common stock of the Borrower Quiksilver 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 the Borrower 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 the Borrower Quiksilver or any Subsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments")) provided, except however, that (i) any Subsidiary (Quiksilver shall be permitted to make payments on account of, and set apart assets for a sinking or other than WTAC) may make Restricted Payments to the Borrower or to any other Wholly Owned Subsidiary of the Borrower and (ii) commencing February 1, 2004analogous fund for, the Borrower may make Restricted Payments purchase, redemption, defeasance, retirement or other acquisition of any shares of its common stock, or any warrants or options to CCI for purchase its common stock, not exceeding US$20,000,000 in the purpose aggregate, so long as no Default or Event of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on the Closing Date; provided that in each case (A) no Default has occurred and is continuing or would result from be caused by any of the making of such Restricted Paymentforegoing, (Bii) the aggregate amount of all Quiksilver and its Subsidiaries shall be permitted to make other Restricted Payments made on or after the Closing Date shall not exceed an amount equal to the difference between so long as (x) after giving pro forma effect thereto, average daily Availability was not less than (x) if the Cumulative Credit and Guarantee Date has not yet occurred, US$25,000,000, or (y) 1.4 times Cumulative Interest Expense (on and after the Agent shall have received a certificate Guarantee Date, US$40,000,000, for any period of a Responsible Officer of thirty consecutive days during the Borrower setting forth calculations supporting 12-month period ending on the condition described in this clause date on which such Restricted Payment is to be made, (y) and (C) with respect the Fixed Charge Coverage Ratio exceeds 1.25 to clause (ii) above, no 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) the Subsidiaries shall in any case be permitted during to pay cash dividends and other distributions, directly or indirectly, to Quiksilver or any period in which Subsidiary, to the Maximum Total Debt Ratio equals extent paid ratably to all stockholders of the Person paying the applicable dividend or exceeds 5.50 to 1.00contribution.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare Declare or pay any dividend (other than dividends payable solely in common stock of the Borrower or its SubsidiariesCompany) 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 the Borrower or its Subsidiaries Company 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 the Borrower Company or any Subsidiary (such declarationsRestricted Subsidiary, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called "Restricted Payments"), except provided that at any time that (i) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower no Default or to any other Wholly Owned Subsidiary Event of the Borrower and (ii) commencing February 1, 2004, the Borrower may make Restricted Payments to CCI for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required pursuant to the terms of the CCI Indenture as in effect on the Closing Date; provided that in each case (A) no Default has occurred and is continuing or would result from therefrom and (ii) the making Total Leverage Ratio as at the end of each of the then most recently ended two consecutive fiscal quarters of the Company for which financial statements have been delivered pursuant to subsection 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 Restricted Paymentrepurchases does not exceed $25,000,000 in any calendar year, (B) the aggregate amount 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 all Restricted Payments made such determination Consolidated Operating Cash Flow for the four-quarter period ended on or after the Closing Date shall not exceed an amount equal to the 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 last day of the Borrower setting forth calculations supporting the condition described second fiscal quarter referred to in this clause (yii) 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 date of each such repurchase pro forma projections showing compliance with respect this Agreement after giving effect to clause (ii) above, no such Restricted Payment shall be permitted during any period in which the Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00repurchase.

Limitation on Dividends. The Borrower shall not, and shall not permit any of its Subsidiaries to (a) if a corporation, declare . (a) Declare or pay any dividend (other than dividends payable solely in Convertible Preferred or common stock of the Borrower or its SubsidiariesMerisel) 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 the Borrower or its Subsidiaries Merisel, 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 the Borrower 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 any change in value of any such Capital Stock (such declarations, payments, setting apart, purchases, redemptions, defeasancedefeasances, retirements, acquisitions and distributions distributions, and such transactions with any Derivatives Counterparties, being herein called "“Restricted Payments"”). Notwithstanding the foregoing clause (a), except Merisel, at any time on or after the Restatement Effective Date, may effect one or more transactions that 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) any Subsidiary (other than WTAC) may make Restricted Payments to the Borrower no Default or to any other Wholly Owned Subsidiary Event of the Borrower Default shall have occurred and be continuing and (ii) commencing February 1, 2004, Borrowers and each Corporate Guarantor are in compliance with the Borrower may make Restricted Payments to CCI covenants set forth in Section 9.1 recomputed for the purpose of permitting CCI to make regularly scheduled payments of interest on the CCI Notes as required 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 this Agreement, and (z) Merisel shall be eligible to file, and shall file, notices with the Securities and Exchange Commission of its withdrawal from reporting company status within nine (9) months from the date of the CCI Indenture as in effect on adoption of a plan by the Closing DateBoard of Directors of Merisel through board resolutions to become a non-reporting company; provided further that in each case no later than ten (A10) no Default has occurred and is continuing or would result from calendar days after Merisel becomes a non-reporting company under the making of such Restricted Payment, (B) Exchange Act the aggregate amount of all Restricted Payments made on or after Loan Parties shall provide the Closing Date shall not exceed an amount equal to the 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 Lender with evidence of the Borrower setting forth calculations supporting transition to non-reporting status along with evidence of consummation of the condition described Stock Repurchase Transactions including any filings, notices, opinions of counsel and any other documents, agreement or instruments contemplated by and executed 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 Maximum Total Debt Ratio equals or exceeds 5.50 to 1.00connection therewith.