Common use of Restriction on Payments Clause in Contracts

Restriction on Payments. (i) Notwithstanding anything contained herein to the contrary, any payment or benefit received or to be received by Employee, whether payable pursuant to the terms of this Agreement or any other plan, arrangements or agreement with the Company or any affiliate of the Company (collectively, the “Total Payments”), shall be reduced to the least extent necessary so that no portion of the Total Payments shall be subject to the excise tax imposed by Section 4999 of the Code, but only if, by reason of such reduction, the Net After-Tax Benefit (as defined below) received by Employee as a result of such reduction will exceed the Net After-Tax Benefit that would have been received by Employee if no such reduction was made. If excise taxes may apply to the Total Payments, the foregoing determination will be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Company and reasonably acceptable to Employee. The Company will direct the Accounting Firm to submit any such determinations and detailed supporting calculations to both Employee and the Company not less than fifteen (15) days before the date on which a payment becomes due. (ii) If the Accounting Firm determines that a reduction in payments is required pursuant to this Section (C), cash benefits shall first be reduced, followed by a reduction of non-cash payments, including option or stock award vesting acceleration, in each case, beginning with payments that would be made last in time and only to the least extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay or provide such reduced amounts to Employee in accordance with the terms of this Agreement or any other applicable plan, arrangement or agreement governing such payments. (iii) If applicable, Employee and the Company will each provide the Accounting Firm access to and copies of any books, records and documents in their respective possession, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section (C). The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by this Section C will be borne by the Company. (iv) For purposes of this Section (C), “Net After-Tax Benefit” means (a) the Total Payments that Employee becomes entitled to receive from the Company or any affiliate of the Company which would constitute “parachute payments” within the meaning of Code Section 280G, less (b) the amount of all federal, state and local income and employment taxes payable by Employee with respect to the Total Payments, calculated at the maximum applicable marginal income tax rate, less (c) the amount of excise taxes imposed on Employee with respect to the Total Payments under Section 4999 of the Code.

Restriction on Payments. (ia) Notwithstanding anything contained herein any provision of the Junior Debt Documents to the contrary, no Distribution with respect to the Junior Debt shall be made or received and retained by a Junior Creditor, and none of the Junior Creditors shall exercise any right of set-off or recoupment with respect to the Junior Debt, until the Senior Debt is Finally Paid; provided that the foregoing shall not restrict Permitted Subordinated Debt Payments when a Payment Blockage Period is not in effect. If a Payment Blockage Period is in effect, only the following Permitted Subordinated Debt Payments shall be permitted until the Senior Debt is Finally Paid: (i) PIK Payments, (ii) Reorganization Subordinated Securities, (iii) payment of closing fees and expenses on the date hereof to the Junior Creditors in respect of the Junior Debt, (iv) payment of the regular fees of the Junior Agent in an aggregate amount not to exceed $50,000 in any calendar year and (v) accrual (but not payment) of additional interest due to the imposition of a default rate of interest. Upon the expiration of any Payment Blockage Period and so long as no other Payment Blockage Period is in effect, Borrowers and the other Obligors may make or benefit received resume making (and Junior Creditors may receive and retain) any and all Permitted Subordinated Debt Payments that would otherwise have been made but for such Payment Blockage Period (“Deferred Permitted Subordinated Debt Payment”). (b) Notwithstanding any provision of this Section 2.2 to the contrary: (i) the aggregate number of days in any consecutive 360-day period during which Payment Blockage Periods may be in effect solely as a result of Senior Non-Payment Defaults shall be one hundred eighty (180) days; (ii) a Senior Non-Payment Default that existed at or prior to the commencement of a Payment Blockage Period may not serve as the basis for the commencement of a subsequent Payment Blockage Period unless the same shall have ceased to exist for a period of at least sixty (60) days prior to the commencement of such subsequent Payment Blockage Period (it being understood that for purposes of this paragraph, breaches of the same financial covenant for consecutive periods shall constitute separate and distinct Senior Non-Payment Defaults); (iii) no more than two (2) Senior Default Notices for Senior Non-Payment Defaults may be received sent during any consecutive 360-day day period and no more than five (5) Senior Default Notices for Senior Non-Payment Defaults may be sent during the term of this Agreement; (iv) the failure of the Borrowers to make any Distribution with respect to the Junior Debt by Employeereason of the operation of this Section 2.2 shall not be construed as preventing the occurrence of a breach of the Junior Debt Documents or a Junior Default; (v) this Section 2.2 shall not be deemed to prohibit (A) the accrual of interest on the Junior Debt, whether payable (B) PIK Payments, (C) the accrual of interest, fees, expenses, costs or other amounts pursuant to the Junior Debt Documents, or (D) the payment of closing fees and expenses to Junior Creditors in respect of the Junior Debt on the date hereof as a condition precedent to the incurrence of the Junior Debt pursuant to the Junior Debt Documents; (vi) a Junior Creditor shall not be deemed to have accepted a Distribution prohibited by the terms of this Agreement or any other plan, arrangements or agreement with the Company or any affiliate of the Company (collectively, the “Total Payments”), shall be reduced to the least extent necessary so that no portion of the Total Payments shall be subject to the excise tax imposed by Section 4999 of the Code, but only if, by reason of 2.2 if such reduction, the Net After-Tax Benefit (as defined below) received by Employee as a result of such reduction will exceed the Net After-Tax Benefit that would have been received by Employee if no such reduction was made. If excise taxes may apply to the Total Payments, the foregoing determination will be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Company and reasonably acceptable to Employee. The Company will direct the Accounting Firm to submit any such determinations and detailed supporting calculations to both Employee and the Company not less than fifteen (15) days before the date on which a payment becomes due. (ii) If the Accounting Firm determines that a reduction in payments is required pursuant to this Section (C), cash benefits shall first be reduced, followed by a reduction of non-cash payments, including option or stock award vesting acceleration, in each case, beginning with payments that would be made last in time and only to the least extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay or provide such reduced amounts to Employee in accordance Junior Creditor complies with the terms of this Agreement or any other applicable plan, arrangement or agreement governing such payments. (iii) If applicable, Employee and the Company will each provide the Accounting Firm access to and copies of any books, records and documents in their respective possession, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section (C). The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by this Section C will be borne by the Company. (iv) For purposes of this Section (C), “Net After-Tax Benefit” means (a) the Total Payments that Employee becomes entitled to receive from the Company or any affiliate of the Company which would constitute “parachute payments” within the meaning of Code Section 280G, less (b) the amount of all federal, state and local income and employment taxes payable by Employee 2.5 with respect to such Distribution and, in any event, such Junior Creditor does not otherwise have actual knowledge that such Distribution was received at a time during which it was prohibited from being received by the Total Payments, calculated at the maximum terms of this Agreement; and (vii) this Section 2.2 shall not be applicable marginal income tax rate, less (c) the amount of excise taxes imposed on Employee with respect when and to the Total Payments under extent Section 4999 of the Code2.3 is applicable.

Restriction on Payments. Notwithstanding any provision of the Subordinated Indebtedness Documents to the contrary and in addition to any other limitations set forth herein or therein, no payment (whether made in cash, securities or other property or by set-off) of principal, interest or any other amount due with respect to the Subordinated Indebtedness (other than (i) Notwithstanding anything contained herein provided no Senior Payment Default exists, reimbursement for reasonable out-of-pocket costs and expenses, including attorneys’ fees and expenses, actually incurred by such Person on matters directly relating to the contrary, any payment or benefit received or to be received by Employee, whether Subordinated Indebtedness and then due and payable pursuant to the terms of this Agreement or any other plan, arrangements or agreement with the Company or any affiliate of the Company (collectively, the “Total Payments”), shall be reduced to the least extent necessary so that no portion of the Total Payments shall be subject to the excise tax imposed by Section 4999 of the Code, but only if, by reason of such reduction, the Net After-Tax Benefit (as defined below) received by Employee as a result of such reduction will exceed the Net After-Tax Benefit that would have been received by Employee if no such reduction was made. If excise taxes may apply to the Total Payments, the foregoing determination will be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Company and reasonably acceptable to Employee. The Company will direct the Accounting Firm to submit any such determinations and detailed supporting calculations to both Employee and the Company not less than fifteen (15) days before the date on which a payment becomes due. (ii) If the Accounting Firm determines that a reduction in payments is required pursuant to this Section (C), cash benefits shall first be reduced, followed by a reduction of non-cash payments, including option or stock award vesting acceleration, in each case, beginning with payments that would be made last in time and only to the least extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, and the Company shall pay or provide such reduced amounts to Employee in accordance with the terms of the Subordinated Indebtedness Documents, to the extent that the aggregate amount of such out-of-pocket costs and expenses, including attorneys’ fees and expenses, does not exceed $100,000 in the aggregate during the term of this Agreement Agreement, (ii) a distribution of Reorganization Subordinated Securities and (iii) Permitted Subordinated PIK Amounts) shall be made or received, and no Subordinated Creditor shall exercise any right of set-off or recoupment with respect to any Subordinated Indebtedness, until all of the Senior Indebtedness (other than Excess Senior Indebtedness) is Paid in Full; provided, however, except as provided in the immediately succeeding sentence or in Section 2.3, Obligors may make and Subordinated Creditors may accept Permitted Subordinated Indebtedness Payments. Notwithstanding the foregoing, no Obligor may make, and no Subordinated Creditor may receive, any payment of principal, interest or any other applicable plan, arrangement or agreement governing such payments. (iii) If applicable, Employee and the Company will each provide the Accounting Firm access to and copies of any books, records and documents in their respective possession, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Section (C). The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by this Section C will be borne by the Company. (iv) For purposes of this Section (C), “Net After-Tax Benefit” means (a) the Total Payments that Employee becomes entitled to receive from the Company or any affiliate of the Company which would constitute “parachute payments” within the meaning of Code Section 280G, less (b) the amount of all federal, state and local income and employment taxes payable by Employee with respect to the Total PaymentsSubordinated Indebtedness (other than (i) provided no Senior Payment Default exists, calculated reimbursement for reasonable out-of-pocket costs and expenses, including attorneys’ fees and expenses, actually incurred by such Person on matters directly relating to the Subordinated Indebtedness and then due and payable in accordance with the terms of the Subordinated Indebtedness Documents, to the extent that the aggregate amount of such out-of-pocket costs and expenses, including attorneys’ fees and expenses, does not exceed $100,000 in the aggregate during the term of this Agreement, (ii) a distribution of Reorganization Subordinated Securities and (iii) Permitted Subordinated PIK Amounts) if, at the maximum applicable marginal income tax ratetime of such payment or immediately after giving effect thereto: (a) subject to Section 2.4, less a Senior Payment Default has occurred and is continuing; or (cb) subject to the penultimate sentence of this Section 2.2, the Subordinated Creditors shall have received a Senior Default Notice from the Senior Agent stating that a Senior Covenant Default exists or would be created by the making of such payment. Obligors may resume Permitted Subordinated Indebtedness Payments (and may make any Permitted Subordinated Indebtedness Payments missed due to the application of clauses (a) or (b) of this Section 2.2) in respect of the Subordinated Indebtedness: (1) in the case of a Senior Payment Default referred to in clause (a) of this Section 2.2, upon the earlier to occur of (x) the amount cure (if such Senior Payment Default is not an Event of excise taxes imposed Default under the Credit Agreement or Permitted Refinancing Loan Documents) or waiver (as evidenced by a written waiver from Senior Agent to Borrowers) of such Senior Payment Default in accordance with the terms of the Credit Agreement or Permitted Refinancing Loan Documents or (y) Payment in Full of the Senior Indebtedness; or (2) in the case of a Senior Covenant Default referred to in clause (b) of this Section 2.2, upon the earliest to occur of (x) the cure (if such Senior Covenant Default is not an Event of Default under the Credit Agreement or Permitted Refinancing Loan Documents) or waiver (as evidenced by a written waiver from Senior Agent to Borrowers) of such Senior Covenant Default in accordance with the terms of the Credit Agreement or Permitted Refinancing Loan Documents, (y) the expiration of one hundred eighty (180) days from the date on Employee which the Senior Default Notice with respect thereto was received and (z) Payment in Full of the Senior Indebtedness. Notwithstanding any provision of this Section 2.2 to the contrary: A. the Obligors shall not be prohibited from making, and Subordinated Creditors shall not be prohibited from receiving, payments as a result of clause (b) of this Section 2.2 for more than an aggregate of one hundred eighty (180) days within any period of three hundred sixty-five (365) consecutive days; B. no Senior Covenant Default existing on the date any notice is given pursuant to clause (b) of this Section 2.2 shall, unless the same shall have ceased to exist for a period of at least sixty (60) consecutive days, be used as a basis for any subsequent such notice (for purposes of this paragraph, breaches of the same financial covenant for consecutive periods shall constitute separate and distinct Senior Covenant Defaults); C. no more than two (2) Senior Default Notices may be sent pursuant to clause (b) of this Section 2.2 during any period of three hundred sixty-five (365) consecutive days and no more than six (6) Senior Default Notices may be sent pursuant to clause (b) of this Section 2.2 in the aggregate; D. Borrowers shall not be prohibited from paying, and the Subordinated Creditors shall not be prohibited from accepting and retaining any payment of the Subordinated Indebtedness consented to in writing by the Senior Agent; E. the failure of Borrowers to make any payment with respect to the Total Payments under Section 4999 Subordinated Indebtedness by reason of the Codeoperation of this Section 2.2 shall not be construed as preventing the occurrence of a Subordinated Default under the applicable Subordinated Indebtedness Documents; and F. each failure of an Obligor to make a payment of principal or interest or a Minimum Fee or Other Payment Amount under the Loan Documents or Permitted Refinancing Loan Documents shall constitute a separate Senior Payment Default, provided, that notwithstanding the foregoing, all Senior Payment Defaults existing at the time that a Permitted Subordinated Indebtedness Payment is due and payable shall constitute a single Senior Payment Default. The provisions of this Section 2.2 shall not apply to any payment with respect to which Section 2.3 would be applicable.