Restriction on Dividends and Other Distributions. The Parent and the Company will not, nor will they permit any Subsidiary to, declare or pay any dividend or make any distribution on its Capital Stock (other than dividends payable in its own Capital Stock) or redeem, repurchase or otherwise acquire or retire any of its Capital Stock at any time outstanding, except that (i) any Subsidiary of the Company may declare and pay dividends and make distributions to the Company or to any other Subsidiary of the Company, (ii) any Subsidiary of the Company which is not a Wholly Owned Subsidiary may pay dividends to its shareholders generally so long as the Company or its respective Subsidiary which owns the equity interest or interests in the Subsidiary paying such dividends receives at least its proportionate share thereof, (iii) the Company may declare and pay dividends and make distributions to the Parent to enable the Parent to, and the Parent may, (a) pay any income, franchise or like taxes, (b) pay its operating expenses (including, without limitation, legal, accounting, reporting, listing and similar expenses) in an aggregate amount not exceeding $5,000,000 in any Fiscal Year (excluding in any event non-cash charges related to employee compensation or compensation to non-executive members of the Parent’s board of directors) and (c) so long as no Default shall be continuing or result therefrom, repurchase its common stock and warrants and/or redeem or repurchase vested management options, in each case, from directors, officers and employees of the Parent and its Subsidiaries, and (iv) so long as no Default shall be continuing or result therefrom, the Company may make distributions to the Parent and the Parent may redeem, repurchase, acquire or retire an amount of its Capital Stock or warrants or options therefor, or declare and pay any dividend or make any distribution on its Capital Stock (all such actions under this clause (iv) collectively, “Distributions”), (a) if at the time of making such Distribution the Leverage Ratio (calculated on a pro forma basis giving effect to any acquisition since the end of the most recently ended Fiscal Quarter, such Distribution and any Indebtedness incurred in connection therewith) is less than or equal to 2.75 to 1.00, on an unlimited basis, and (b) if at the time of making such Distribution the Leverage Ratio (calculated on a pro forma basis giving effect to any acquisition since the end of the most recently ended Fiscal Quarter, such Distribution and any Indebtedness incurred in connection therewith) is greater than 2.75 to 1.00, in an amount not greater than the Maximum Payment Amount. Notwithstanding the foregoing, (i) if at any time the restriction on dividends covenant in the Credit Agreement is amended, replaced or removed, this Section 10.8 shall automatically be amended, replaced or removed so that it shall be identical to the Credit Agreement and (ii) if the Credit Agreement is terminated and not replaced by a successor Credit Agreement, this Section 10.8 shall terminate and be of no further force or effect.
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Sources: Master Note Purchase Agreement (United Stationers Inc), Master Note Purchase Agreement (United Stationers Inc)
Restriction on Dividends and Other Distributions. The Parent and the Company will not, nor will they permit any Subsidiary to, declare or pay any dividend or make any distribution on its Capital Stock (other than dividends payable in its own Capital Stock) or redeem, repurchase or otherwise acquire or retire any of its Capital Stock at any time outstanding, except that (i) any Subsidiary of the Company may declare and pay dividends and make distributions to the Company or to any other Subsidiary of the Company, (ii) any Subsidiary of the Company which is not a Wholly Owned Subsidiary may pay dividends to its shareholders generally so long as the Company or its respective Subsidiary which owns the equity interest or interests in the Subsidiary paying such dividends receives at least its proportionate share thereof, (iii) the Company may declare and pay dividends and make distributions to the Parent to enable the Parent to, and the Parent may, (a) pay any income, franchise or like taxes, (b) pay its operating expenses (including, without limitation, legal, accounting, reporting, listing and similar expenses) in an aggregate amount not exceeding $5,000,000 10,000,000 in any Fiscal Year (excluding in any event non-cash charges related to employee compensation or compensation to non-executive members of the Parent’s board of directors) and (c) so long as no Default or Event of Default shall be continuing or result therefrom, repurchase its common stock and warrants and/or redeem or repurchase vested management options, in each case, from directors, officers and employees of the Parent and its Subsidiaries, and (iv) so long as no Default or Event of Default shall be continuing or result therefrom, the Company may make distributions to the Parent and the Parent may redeem, repurchase, acquire or retire an amount of its Capital Stock or warrants or options therefor, or UNITED STATIONERS SUPPLY CO. Note Purchase Agreement declare and pay any dividend or make any distribution on its Capital Stock (all such actions under this clause (iv) collectively, “Distributions”)) if, (a) if at the time of making such Distribution Distribution, the Leverage Ratio (calculated on a pro forma basis based on the Parent’s most recent financial statements delivered pursuant to Section 7.1 and giving effect to any acquisition since the end of the most recently ended Fiscal Quarter, such Distribution and any Indebtedness incurred in connection therewith and any Acquisition (including any incurrence of Indebtedness in connection therewith) and Material Disposition (including any reduction of Indebtedness in connection therewith) since the date of such financial statements, as if such Distribution and any such Acquisition and Material Disposition (and any incurrence or reduction of Indebtedness in connection with any of the foregoing) had occurred as of the first day of the four Fiscal Quarter period set forth in such financial statements) is (a) less than or equal to 2.75 3.00 to 1.00, on an unlimited basis, and (b) if at the time of making such Distribution the Leverage Ratio (calculated on a pro forma basis giving effect to any acquisition since the end of the most recently ended Fiscal Quarter, such Distribution and any Indebtedness incurred in connection therewith) is greater than 2.75 or equal to 3.00 to 1.00, in an amount not greater than the Maximum Payment Amount. Notwithstanding the foregoing, (i) if at any time the restriction on dividends covenant in the Credit Agreement is amended, replaced or removed, this Section 10.8 shall automatically be amended, replaced or removed so that it shall be identical to the Credit Agreement and (ii) if the Credit Agreement is terminated and not replaced by a successor Credit Agreement, this Section 10.8 shall terminate and be of no further force or effect.
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