Common use of Mandatory Prepayments and Commitment Reductions Clause in Contracts

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

Mandatory Prepayments and Commitment Reductions. (a) If for If, at any reason time during the Total period from the Closing Date through and including the Revolving Extensions of Credit exceeds Termination Date, the lesser of (xi) the Borrowing Base and (ii) the Total Revolving Borrowing Base Commitments then in effect and (y) exceeds the Maximum Permitted Outstanding AmountBorrowing Base Extensions of Credit, the Borrower shall immediatelyshall, without notice or demand, prepay the applicable Loans in an aggregate principal amount equal to such excess, together (except in the case of Revolving Credit Loans which are Base Rate Loans) with interest accrued to the date of such payment or prepayment. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness [Reserved] (e) Upon the occurrence of a Change of Control, the Borrower shall, without notice or demand, immediately prepay all Loans in full, whereupon all Revolving Credit Commitments, if in effect, shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loansterminated. (ef) Any reduction of the Revolving Credit Commitments pursuant to this Section shall be accompanied by prepayment of the Revolving Credit Loans to the extent, if any, that the Total Revolving Outstanding Extensions of Credit exceed the amount of the Total Revolving Credit Commitments as so reduced, ; provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent any prepayment of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment Loans that are Eurodollar Loans pursuant to this Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. made on the last day of the Interest Period with respect thereto in which the relevant prepayment is required. (g) Each prepayment of the Revolving Term Loans under this Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. Amounts prepaid on account of the Term Loans may not be reborrowed.

Mandatory Prepayments and Commitment Reductions. Section 2.12 of the Credit Agreement is hereby amended by adding the following paragraph at the end of subsection (ab) If for of such Section 2.12 as follows: Notwithstanding the foregoing, in the event and on each occasion that the Parent Borrower receives any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding AmountNet Proceeds from an Equity Issuance subsequent to July 25, 2008, the Parent Borrower shall immediatelyshall, prepay within five (5) Business Days after such Net Proceeds are received, make and apply the applicable Loans payments as described in the immediately following sentence (and not as otherwise provided in the first sentence of Section 2.12(h)(2) below) in an aggregate amount equal to such excess. not less than the sum of (bi) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the first $60,000,000 of all such Net Cash Proceeds; (ii) 100% of such additional amount of all such Net Proceeds thereof shall as may be immediately applied toward necessary for the prepayment Parent Borrower to satisfy (on a pro forma basis giving effect to the receipt and application of such Net Proceeds against the ESI Credit Facility as provided herein) the maximum Leverage Ratio as applicable following such Equity Issuance pursuant to Section 6.1, and (iii) 50% of any additional amount of all such Net Proceeds remaining after the requirements of the Loans. preceding clauses (ei) Any reduction and (ii) have been met; provided, however, that solely with respect to any prepayment otherwise required by the preceding clause (iii), the Parent Borrower may, at its option in lieu of such prepayment pursuant to clause (iii), elect to apply all or a portion of such prepayment as an investment in the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans Subsidiary Borrower to the extent, if anyand in the same manner, that as permitted pursuant to the Total Revolving Extensions of “proviso” in clause (ii) in the immediately preceding paragraph in this Section 2.12(b). Any required prepayments pursuant to this paragraph shall be applied solely against the ESI Credit exceed Facility, and shall cause an automatic reduction in the amount of the Total Revolving Aggregate ESI Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.92.12(e) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaidbelow.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason Capital Stock or Indebtedness shall be issued or incurred by the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding AmountGuarantor, the Borrower shall immediatelyor any Subsidiary (excluding any Indebtedness incurred in accordance with Section 6.2(a), prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] ), (c), (e), (f), (g), (h), (i), (j), (k), (l) [Reserved] and (d) If any Indebtedness shall be incurred pursuant to Section 7.2(hm)), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied on the date of such issuance or incurrence toward the prepayment reduction of the LoansCommitments as set forth in Section 2.17(d). (eb) Any If on any date, the Guarantor, the Borrower or any Subsidiary shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then such Net Cash Proceeds shall be applied on such date toward the reduction of the Revolving Commitments as set forth in Section 2.17(d). (c) If the Acquisition has not been consummated within seven days after the Closing Date, the Commitments shall automatically terminate on the date that is seven days after the Closing Date. (d) Amounts to be applied in connection with Commitment reductions made pursuant to Section 2.17 shall be applied to reduce permanently the Commitments. Any such reduction of the Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit Loans exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 2.17 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 2.17 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

Mandatory Prepayments and Commitment Reductions. (a) If for on any reason date any Group Member shall receive Net Cash Proceeds from any Asset Sale (other than a sale of Capital Stock of ACEP) or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied on such date toward the Total Revolving Extensions prepayment of Credit exceeds the lesser of Loans as set forth in Section 3.2(b); provided, that, notwithstanding the foregoing, (xi) the Total Revolving Commitments then aggregate Net Cash Proceeds of Asset Sales and Recovery Events that may be excluded from the foregoing requirement pursuant to a Reinvestment Notice shall not exceed $5,000,000 in effect any fiscal year of ACEP and (yii) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h)on each Reinvestment Prepayment Date, an amount equal to 100% of the Net Cash Proceeds thereof Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be immediately applied toward the prepayment of the LoansLoans as set forth in Section 3.2(b); provided, that any such prepayment shall not constitute a reduction of the Commitments. (eb) The application of any prepayment pursuant to Section 3.2 shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each prepayment of the Loans under Section 3.2 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (c) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment Credit and/or deposit an amount in cash in a cash collateral account established with the Administrative Agent for the benefit of the Revolving Loans under Section 2.6 (except Lenders in the case an amount equal to 105% of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest such balance of such excess and otherwise on terms and conditions satisfactory to the date of such prepayment on the amount prepaidAdministrative Agent.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness (excluding any Indebtedness incurred in accordance with Section 6.02), shall be issued or incurred pursuant to Section 7.2(h)by any Borrower, an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied on the date of such issuance or incurrence toward the prepayment of the Term Loans as set forth in Section 2.09(c). (b) If on any date any Borrower shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied on such date toward the prepayment of the Term Loans as set forth in Section 2.09(c); provided, that, (i) the aggregate Net Cash Proceeds of Asset Sales and Recovery Events that may be excluded from the foregoing requirement pursuant to a Reinvestment Notice shall not exceed $500,000 in any Fiscal Year and (ii) on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of the Loans. (e) Any Term Loans and the reduction of the Revolving Commitments as set forth in Section 2.09(c). (c) Amounts to be applied in connection with prepayments made pursuant to paragraph (a) or (b) of this Section 2.09 shall be accompanied by prepayment of the Revolving Loans applied to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Term Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereofin accordance with Section 2.15(b), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under pursuant to paragraph (a) or (b) of this Section 2.6 (except in the case of Revolving Loans that are ABR Loans) 2.09 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (d) If for any reason the Aggregate Outstanding Revolving Credit at any time exceeds the Total Revolving Commitments then outstanding, the Borrowers shall immediately prepay the Revolving Loans in an aggregate amount equal to such excess.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower Borrowers shall immediately, immediately prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved]. (c) [Reserved]Reserved]On March 31, 2021, the Total Revolving Commitments shall be reduced automatically to $400,000,000 and, concurrently with such reduction, the Borrowers shall make any DocID \\DC - 036150/000014 - 15261895 v6 (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower Borrowers shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (f) At any time during the Suspension Period and upon the occurrence of any of the following events, the Borrowers shall prepay the Revolving Loans at par plus accrued and unpaid interest, in each case, on a dollar-for-dollar basis within one Business Day of receipt of such Net Cash Proceeds, in an amount equal to: (i) 100% of the Net Cash Proceeds of (a) any Disposition of assets (other than from (I) casualty or condemnation events, (II) any intercompany transfers, provided proceeds from transfers of assets from Loan Parties to non-Loan Parties will not be so excluded, (III) other Dispositions of assets not to exceed $50,000,000 in the aggregate for all such Dispositions, (IV) dispositions of worn out, surplus or obsolete equipment in the ordinary course of business and (V) Dispositions of assets the proceeds of which are to be applied to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof)) by the Parent Borrower or any of its Subsidiaries (or, in the case of any non-Wholly-Owned Subsidiary of the Parent Borrower, the applicable parent’s allocable share of such proceeds) and (b) any Designated Asset Sales. (ii) 100% of the Net Cash Proceeds of incurrences of Indebtedness of the Parent Borrower or its Subsidiaries other than (i) any intercompany Indebtedness of the Parent Borrower or any of its Subsidiaries, (ii) any re-financing of existing Indebtedness not increasing the existing amount (or commitments, if applicable) thereof in excess of the principal amount of the Indebtedness being refinanced, plus accrued interest, fees, premiums and refinancing expenses, (iii) Subscription Line Indebtedness, (iv) Indebtedness incurred pursuant to debt facility commitments in existence prior to the commencement of the Suspension Period (and not incurred in contemplation thereof) and any replacement or refinancing thereof not increasing the amount (or amount of commitments, as applicable) thereof and (v) Indebtedness to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof). (iii) 100% of the Net Cash Proceeds from the issuance of any Capital Stock by the REIT Entity (other than (A) issuances and settlements pursuant to employee stock plans or other benefit or employee incentive arrangements, (B) issuances of shares of capital stock or rights to Wholly-Owned Subsidiaries of the Parent Borrower, (C) issuances of shares of Capital Stock in connection with the conversion of convertible shares or units of such party outstanding as of the DocID \\DC - 036150/000014 - 15261895 v6 date hereof or otherwise issued in compliance with Section 5.01(c) of the Merger Agreement and (D) issuances to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof)).

Mandatory Prepayments and Commitment Reductions. (a) If for any reason Unless the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding AmountRequired Lenders shall otherwise agree, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If if any Indebtedness shall be incurred pursuant to issued or Incurred by the Borrower or any of its Subsidiaries (excluding any Indebtedness Incurred in accordance with Section 7.2(h7.2), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied on the date of such issuance or Incurrence toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments as set forth in Section 2.8(c). (a) Unless the Required Lenders shall otherwise agree, if on any date the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied on such date toward the reduction of the Revolving Commitments as set forth in Section 2.8(c); provided, that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the reduction of the Revolving Commitments as set forth in Section 2.8(c). (b) Amounts to be applied in connection with Revolving Commitment reductions made pursuant to this Section 2.8 shall be accompanied by prepayment of the Revolving Loans and/or Swingline Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans and Swingline Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of CreditCredit and/or deposit an amount in cash in a cash collateral account established with the Administrative Agent for the benefit of the Lenders on terms and conditions satisfactory to the Administrative Agent. The application of any prepayment pursuant to this Section 2.6 2.8 shall be made, first, made first to ABR Loans and, second, and second to Eurodollar Loans. Each prepayment of the Revolving Loans under this Section 2.6 2.8 (except in the case of Revolving Loans that are ABR Eurodollar Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred by any Group Member (excluding any Indebtedness incurred in accordance with Section 7.2 or permitted by the Required Lenders pursuant to Section 7.2(h10.1 (except as may be otherwise agreed to by the Required Lenders in connection with their approval of such Indebtedness pursuant to Section 10.1)), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied on the date of such incurrence toward the reduction of the Revolving Commitments as set forth in Section 2.8(c). (b) If on any date any Group Member shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied on such date toward the prepayment of the Revolving Loans and, if applicable, the reduction of the Revolving Commitments as set forth in Section 2.8(c); PROVIDED, that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of the LoansRevolving Loans and, if applicable, the reduction of the Revolving Commitments as set forth in Section 2.8(c). (ec) Amounts to be applied pursuant to Section 2.8(a) shall be applied to reduce permanently the Revolving Commitments. Amounts to be applied pursuant to Section 2.8(b) shall be applied to prepay outstanding Revolving Loans and/or Swingline Loans without reduction of the Revolving Commitments (and if no such Loans are outstanding prior to such prepayment or after giving effect to a portion of such prepayment, such excess proceeds may be applied by the Borrower in any manner not prohibited by this Agreement); PROVIDED that notwithstanding the foregoing, if the aggregate amount of prepayments pursuant to Section 2.8(b) exceeds $20,000,000, any amount in excess thereof that would otherwise be applied toward the prepayment of the Revolving Loans without reduction of the Revolving Commitments shall instead be applied to reduce permanently the Revolving Commitments. Any such reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans and/or Swingline Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that PROVIDED that, in the case of any such permanent reduction of the Revolving Commitments, if the aggregate principal amount of Revolving Loans and Swingline Loans then outstanding is less than the amount by which the Total Revolving Extensions of such excess Credit exceeds the amount of Total Revolving Commitments as so reduced (because L/C Obligations constitute a portion thereof), the Borrower shall, if an Event of Default shall have occurred and be continuing, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of CreditCredit and/or deposit an amount in cash in a cash collateral account established with the Administrative Agent for the benefit of the Lenders on terms and conditions satisfactory to the Administrative Agent. The application of any prepayment pursuant to Section 2.6 2.8 or Section 7.5(a)(v) shall be made, firstFIRST, to ABR Loans and, secondSECOND, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 2.8 or Section 7.5(a)(v) (except in the case of Revolving Loans that are ABR Loans and Swingline Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. Unless required as a result of the permanent reduction of Revolving Commitments, any Revolving Loans prepaid hereunder may be reborrowed.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower Borrowers shall immediately, immediately prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved]. (c) [Reserved]On March 31, 2021, the Total Revolving Commitments shall be reduced automatically to $400,000,000 and, concurrently with such reduction, the Borrowers shall make any prepayment of Loans (and, if applicable, cash collateralize outstanding Letters of Credit), in each case, to the extent required pursuant to Section 2.6(e) as a result of such reduction. (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower Borrowers shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

Mandatory Prepayments and Commitment Reductions. (a) If for Upon receipt by the Borrower or any reason of its Subsidiaries of any Net Proceeds in connection with the Total Revolving Extensions incurrence of Credit exceeds any Indebtedness by the lesser of Borrower or such Subsidiary (x) other than Excepted Indebtedness), then on the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amountfirst Business Day after such incurrence, the Borrower shall immediately, prepay the applicable Term Loans as provided for herein in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of such Net Proceeds. (b) Any prepayment required by the Net Cash Proceeds thereof terms of this subsection 2.15 shall be immediately applied toward to the prepayment of the LoansTerm Loans until the Term Loans shall have been satisfied in full. Amounts prepaid on account of the Term Loans may not be reborrowed. (ec) Any reduction Each prepayment of the Revolving Commitments Term Loans pursuant to this subsection 2.15 shall be accompanied by prepayment payment in full of all accrued interest thereon to and including the Revolving Loans date of such prepayment, together with any additional amounts owing pursuant to subsection 2.26. (d) If at any time the extent, if any, that the Total Aggregate Outstanding Revolving Extensions of Credit of all the Revolving Credit Lenders shall exceed the amount Aggregate Revolving Credit Commitments by as much as $5,000,000 (by virtue of any change in the Total exchange rate of any Foreign Currency in which a Revolving Commitments as so reducedCredit Loan or a Letter of Credit is denominated or otherwise), provided that if the aggregate principal amount of Borrower shall immediately prepay the Revolving Credit Loans and/or cash collateralize the then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, by an amount equal to the extent such excess within three Business Days. Any such cash collateralization of the balance of such excess, cash collateralize on or prior to the date of such reduction (L/C Obligations shall be accomplished in the manner described contemplated in the penultimate paragraph of Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment 8 concerning the acceleration of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaidobligations hereunder.

Mandatory Prepayments and Commitment Reductions. (a) If If, at any time during the Revolving Credit Commitment Period for any reason a period in excess of five consecutive Business Days, the amount of the Total Revolving Extensions of Credit of all Lenders exceeds the lesser of (xi) the Borrowing Base and (ii) the Total Revolving Credit Commitments then in effect and (y) whether as a result of the Maximum Permitted Outstanding Amountsale of assets included in the Borrowing Base or otherwise), the Borrower shall immediatelyshall, without notice or demand, either (A) prepay (including, without limitation, in the applicable case of an Asset Sale (as defined in the Supplemental Credit Facility) in respect of assets included in the Borrowing Base, with the Net Cash Proceeds (as defined in the Supplemental Credit Facility) of such Asset Sale), in accordance with this Section, the Revolving Credit Loans and the Swing Line Loans in an aggregate principal amount equal to such excess. , together (bexcept in the case of Revolving Credit Loans which are Base Rate Loans and Swing Line Loans) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans with interest accrued to the extent, if any, that the Total Revolving Extensions date of Credit exceed the amount of the Total Revolving Commitments as so reduced, such payment or prepayment; provided that if the aggregate principal amount of Revolving Credit Loans and Swing Line Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, replace outstanding Letters of Credit and/or cash collateralize on such Letters of Credit in the manner described in Section 3.9 or prior (B) provide additional assets to be included in the date Borrowing Base in accordance with Section 2.3 sufficient to eliminate such excess. (b) Upon the occurrence of a Change of Control, the Borrower shall, without notice or demand, immediately prepay all Revolving Credit Loans and all Swing Line Loans then outstanding, and replace outstanding Letters of Credit and/or cash collateralize such reduction (Letters of Credit in the manner described in Section 3.9, whereupon all Revolving Credit Commitments shall be terminated. (c) If, at any time during the Revolving Credit Commitment Period, by reason of a change in currency exchange rates, the aggregate amount of the Total Revolving Extensions of Credit exceeds the Total Revolving Credit Commitments, the Borrower shall, upon learning thereof or upon the request of the Administrative Agent, immediately prepay the Revolving Credit Loans by an amount at least equal to the amount of such excess. For purposes of this paragraph, the Administrative Agent, in cooperation with the relevant Issuing Lenders, will calculate the amount of L/C Obligations outstanding no less frequently than once per calendar month. (d) Any reduction of the Revolving Credit Commitments pursuant to this Section shall be accompanied by prepayment of the Revolving Credit Loans and/or Swing Line Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Credit Commitments as so reduced, provided that if the aggregate principal amount of Revolving Credit Loans and Swing Line Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, replace outstanding Letters of Credit. The application Credit and/or cash collateralize such Letters of any prepayment pursuant to Credit in the manner described in Section 2.6 shall be made, first, to ABR Loans 3.9; and, secondprovided, to Eurodollar Loans. Each further, that any prepayment of the Revolving Credit Loans under Section 2.6 (except in or the case of Revolving Loans Swing Line Loan that are ABR Loans) Eurodollar Loans pursuant to this Section shall be accompanied by accrued interest to the date of such prepayment made on the amount prepaidlast day of the Interest Period with respect thereto in which the relevant prepayment is required.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason (x) the Total Revolving Extensions of Credit exceeds the lesser of (xxi) the Total Revolving Commitments then in effect and (y)ii) the Maximum Permitted Outstanding Amount or (y) the sum of the Total Extensions of Credit plus the Total CMBX Termination Liability exceeds the Maximum Permitted Outstanding Amount, the Borrower Borrowers shall immediately, immediately prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower Borrowers shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

Mandatory Prepayments and Commitment Reductions. (ai) If for In the event of the termination of all the Revolving Commitments, the Borrower shall, on the date of such termination, repay or prepay all outstanding Revolving Loans. (ii) In the event of any reason partial reduction of the Revolving Commitments pursuant to Section 2.07 or Section 2.09(b), then (x) at or prior to the effective date of such reduction, the Administrative Agent shall notify the Borrower and the Revolving Lenders of the Total Revolving Extensions of Credit exceeds Exposure after giving effect thereto and (y) if the lesser of (x) Total Revolving Exposure would exceed the Total Revolving Commitments after giving effect to such reduction, then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower shall immediatelyshall, on the date of such reduction, repay or prepay the applicable Revolving Loans in an aggregate amount equal sufficient to eliminate such excessexcess for such date. (b) [Reserved] (c) [Reserved] (diii) If at any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of time the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of Total Revolving Exposure exceeds the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of at such excess (because L/C Obligations constitute a portion thereof)time, the Borrower shall, without notice or demand, immediately repay or prepay Revolving Loans in an aggregate amount sufficient to the extent of the balance of eliminate such excess; provided, cash collateralize on that any such repayment or prior prepayment shall not be required to permanently reduce the Revolving Commitments below the Total Revolving Commitment then in effect. (iv) On (i) the date of such reduction any Asset Sale in respect of a Collateral Vessel, Sale and Leaseback Transaction or other disposition (a “Collateral Disposition”) in respect of a Collateral Vessel (or Asset Sale in respect of the Equity Interests in the manner described owner of a Collateral Vessel) (such date, the “Collateral Disposition Date”) and (ii) the earlier of (A) the date which is one hundred ​ and eighty (180) days following the Total Loss Date in Section 3.9respect of a Collateral Vessel (or, if such date is not a Business Day, on the following Business Day) and (B) the date of receipt by the Borrower, any Subsidiary Guarantor or replace outstanding Letters the Administrative Agent of Credit. The application the insurance proceeds relating to such Total Loss (or, if such date is not a Business Day, on the following Business Day); provided that if any Collateral Vessel which is the subject of any a Requisition is redelivered to the full control of the Subsidiary Guarantor prior to such date, no prepayment pursuant or reduction shall be required, in each case, the Borrower shall, subject to Section 2.6 shall be made2.10(e), first, to ABR repay an aggregate principal amount of outstanding Term Loans and permanently reduce Revolving Commitments (and, second, to Eurodollar Loans. Each prepayment of if the Total Revolving Exposure exceeds the Revolving Loans under Section 2.6 (except in the case Commitments at such time, prepay a corresponding amount of Revolving Loans in an amount sufficient to eliminate such excess) in an amount equal to the then aggregate outstanding principal amount of the Term Loans, Revolving Loans and undrawn Revolving Commitments, multiplied by a fraction, the numerator of which is the Vessel Appraisal Value of the affected Collateral Vessel subject to such sale, total loss or other disposition and the denominator of which is the aggregate of the Vessel Appraisal Values of all Collateral Vessels (including such affected Collateral Vessel) (such amount, the “Relevant Amount”); provided further that are ABR Loans) the Borrower shall be accompanied by accrued interest entitled to reinvest the proceeds of such sale, total loss or other disposition and subsequently reinstate such reduced Revolving Commitments, pursuant to paragraph (e) of this Section 2.10 below. (v) In the event the Borrower fails to satisfy the Collateral Maintenance Test, the Borrower shall, within 30 days thereafter, either (i) post additional collateral satisfactory to the date of Required Lenders or (ii) prepay the Credit FacilitiesRevolving Facility and/or reduce the applicable Commitments in an amount sufficient to allow the Borrower to comply with the Collateral Maintenance Test; provided, that, any such prepayment on shall not be required to permanently reduce the amount prepaidRevolving Commitments.

Mandatory Prepayments and Commitment Reductions. (a) If for on any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amountdate any Group Member shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness unless a Reinvestment Notice shall be incurred pursuant to delivered in respect thereof, such Net Cash Proceeds shall be applied on such date toward the prepayment of the Loans as set forth in Section 7.2(h2.5(b); provided that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to 100% of the Net Cash Proceeds thereof Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be immediately applied toward the prepayment of the LoansLoans as set forth in Section 2.5(b). (eb) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 2.5 shall be made, first, to ABR Base Rate Loans and, second, to Eurodollar Loans. Prepayments pursuant to Section 2.5 shall be applied pro rata against the remaining scheduled installments due in respect of the Loans under Section 2.3. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) 2.5 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaidprepaid and shall be subject to Section 2.14, but shall otherwise be without premium or penalty, except as set forth in the immediately following sentence. Each prepayment in respect of the Loans pursuant to Section 2.5 shall be accompanied by a prepayment premium equal to (i) if such prepayment is made on or after the date hereof but on or prior to February 1, 2007, 3.0% of the aggregate principal amount of such prepayment, and (ii) if such prepayment is made after February 1, 2007 but on or prior to February 1, 2008, 1.5% of the aggregate principal amount of such prepayment, provided that, notwithstanding the foregoing, the prepayment premium provided for in this sentence shall not be payable with respect to the first $10,000,000 of prepayments of Loans pursuant to Section 2.5 that are made after the date hereof.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (f) At any time during the Suspension Period and upon the occurrence of any of the following events, the Borrower shall prepay the Revolving Loans at par plus accrued and unpaid interest, in each case, on a dollar-for-dollar basis within one Business Day of receipt of such Net Cash Proceeds, in an amount equal to: (i) 100% of the Net Cash Proceeds of (a) any Disposition of assets (other than from (I) casualty or condemnation events, (II) any intercompany transfers, provided proceeds from transfers of assets from Loan Parties to non-Loan Parties will not be so excluded, (III) other Dispositions of assets not to exceed $50,000,000 in the aggregate for all such Dispositions, (IV) dispositions of worn out, surplus or obsolete equipment in the ordinary course of business and (V) Dispositions of assets the proceeds of which are to be applied to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof)) by the Borrower or any of its Subsidiaries (or, in the case of any non-Wholly-Owned Subsidiary, the applicable parent’s allocable share of such proceeds) and (b) any Designated Asset Sales. (ii) 100% of the Net Cash Proceeds of incurrences of Indebtedness of the Borrower or its Subsidiaries other than (i) any intercompany Indebtedness of the Borrower or any of its Subsidiaries, (ii) any re-financing of existing Indebtedness not increasing the existing amount (or commitments, if applicable) thereof in excess of the principal amount of the Indebtedness being refinanced, plus accrued interest, fees, premiums and refinancing expenses, (iii) Subscription Line Indebtedness, (iv) Indebtedness incurred pursuant to debt facility commitments in existence prior to the commencement of the Suspension Period (and not incurred in contemplation thereof) and any replacement or refinancing thereof not increasing the amount (or amount of commitments, as applicable) thereof and (v) Indebtedness to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof). (iii) 100% of the Net Cash Proceeds from the issuance of any Capital Stock by the REIT Entity (other than (A) issuances and settlements pursuant to employee stock plans or other benefit or employee incentive arrangements, (B) issuances of shares of capital stock or rights to Wholly-Owned Subsidiaries, (C) issuances of shares of Capital Stock in connection with the conversion of convertible shares or units of such party outstanding as of the date hereof or otherwise issued in compliance with Section 5.01(c) of the Merger Agreement and (D) issuances to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof)).

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower Borrowers shall immediately, immediately prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower Borrowers shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any ----------------------------------------------- Indebtedness shall be incurred pursuant to Section 7.2(h)by Holdings or any of its Subsidiaries (excluding any Indebtedness incurred in accordance with subsection 7.2) or any Capital Stock shall be issued or sold by Holdings or any of its Subsidiaries, an amount equal to (i) 100% of the Net Cash Proceeds thereof in the case of an incurrence of Indebtedness, and (ii) 66 2/3% of the Net Cash Proceeds in the case of an issuance or sale of Capital Stock, shall be immediately applied on the date of such issuance or incurrence toward the prepayment of the LoansTerm Loans and the permanent reduction of the Revolving Credit Commitments as set forth in subsection 2.10(d). (eb) The Borrower shall apply the amount if any, of Net Cash Proceeds received by Holdings or any of its Subsidiaries after January 1, 2001 in connection with any Capital Lease Obligation or other transaction permitted by subsections 7.2(k) or 7.10 toward the prepayment of the Term Loans and the permanent reduction of the Revolving Credit Commitments as set forth in subsection 2.10(d). (c) If on any date Holdings or any of its Subsidiaries shall receive (i) Net Cash Proceeds from any Asset Sale or (ii) Net Cash Proceeds in excess of $250,000 from any Recovery Event, other than as specified on the attached Schedule 2.10, then such Net Cash Proceeds shall be applied on such date toward ------------- the prepayment of the Term Loans and the reduction of the Revolving Credit Commitments as set forth in subsection 2.10(d). (d) Amounts to be applied in connection with prepayments and Commitment reductions made pursuant to clauses (a), (b) and (c) of this subsection 2.10 shall be applied first, to prepay any Term Loans outstanding at such time, and second, to permanently reduce the Revolving Credit Commitments. Any reduction of the Term Loans pursuant to this subsection 2.10 shall be applied to the installments of any such Term Loans ratably in accordance with the then outstanding amounts thereof and may not be reborrowed. Any reduction of the Revolving Credit Commitments pursuant to subsection 2.11 shall be accompanied by prepayment of the Revolving Credit Loans and/or Swing Line Loans to the extent, if any, that the Total Aggregate Revolving Extensions of Credit Outstandings exceed the amount of the Total Revolving Credit Commitments as so reduced, provided -------- that if the aggregate Dollar Equivalent principal amount of Revolving Credit Loans and Swing Line Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of CreditCredit and/or deposit an amount in cash in a cash collateral account established with the Administrative Agent for the benefit of the Lenders on terms and conditions satisfactory to the Administrative Agent. The application of any prepayment pursuant to Section 2.6 this subsection 2.10 shall be made, first, to ABR Base ----- Rate Loans and, second, to Eurodollar Eurocurrency Loans. Each prepayment of the Revolving Loans ------ under Section 2.6 this subsection 2.10 (except in the case of Revolving Credit Loans that are ABR Base Rate Loans and Swing Line Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (e) outstanding and, last, cash collateralize any outstanding L/C Obligation in an ---- amount equal to such excess.

Mandatory Prepayments and Commitment Reductions. (a) If for On the Termination Date, the Aggregate Commitment shall terminate and Toy Biz shall cause all Payment Obligations to be Fully Satisfied. (b) If, at any reason time and from time to time, the Total Revolving Aggregate Outstanding Extensions of Credit of all Banks then outstanding exceeds the lesser Aggregate Commitment (including, without limitation, as a result of (xany permanent reduction in the Aggregate Commitment provided for in subsection 3.1 or this subsection 3.3) or the Total Revolving Commitments Borrowing Base then in effect effect, Toy Biz shall immediately repay the Loans and (y) cash collateralize the Maximum Permitted Outstanding Amount, L/C Obligations by the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved]If Toy Biz or any of its Subsidiaries shall receive any Net Cash Proceeds as a result of the sale or issuance of equity securities (other than in connection with (i) the IPO and (ii) stock options outstanding on the date hereof or hereafter issued in connection with the Toy Biz Stock Option Plan) or the incurrence of Indebtedness (other than any Indebtedness incurred in reliance upon the provisions of subsection 7.1), then the Aggregate Commitment shall immediately be reduced (and, to the extent that a Default or Event of Default is then continuing, the Loans shall be repaid and the L/C Obligations shall be cash collateralized) by an amount equal to such Net Cash Proceeds. (d) If Toy Biz or any Indebtedness of its Subsidiaries shall receive any Net Cash Proceeds from the sale, lease or other disposition by Toy Biz or any of its Subsidiaries of any assets, other than assets sold in reliance upon the provisions of subsection 7.5, then the Aggregate Commitment shall immediately be reduced (and, to the extent that a Default or Event of Default is then continuing, the Loans shall be incurred pursuant to Section 7.2(h), repaid and the L/C Obligations shall be cash collateralized) by an amount equal to 100% of the such Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the LoansProceeds. (e) Any reduction If Toy Biz or any of its Subsidiaries shall receive any payments of principal under the Revolving Commitments Colorforms Note, then the Aggregate Commitment shall immediately be reduced (and, to the extent that a Default or Event of Default is then continuing, the Loans shall be accompanied by prepayment of repaid and the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loanscash collateralized) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaidequal to such payment.

Mandatory Prepayments and Commitment Reductions. (a) If for The Borrower shall promptly give notice to the Administrative Agent of the consummation of any reason Prepayment Event which will result in a mandatory prepayment and/or cash collateralization pursuant to subsection 2.6(d). Upon receipt by the Total Parent or any of its Subsidiaries of any Net After-Tax Cash Proceeds with respect to any Prepayment Event, then on the fifth Business Day after receipt of such Net After-Tax Cash Proceeds from such Prepayment Event, the Revolving Extensions Credit Commitments shall, subject to subsections 2.6(c) and 2.6(d), be reduced by an amount equal to 50% of such Net After-Tax Cash Proceeds. (b) Subject to subsection 2.6(c), the Revolving Credit exceeds Commitments shall be reduced by $12,500,000 on January 4, 1999 and by $12,500,000 on January 3, 2000. (c) Notwithstanding anything to the lesser contrary contained herein, in no event shall the Borrower or the Parent be required pursuant to the terms of subsection 2.6(a) or 2.6(b) to reduce the aggregate Revolving Credit Commitments of all the Lenders below $75,000,000. (xd) Each reduction of the Total Revolving Credit Commitments pursuant to this subsection 2.6 shall reduce permanently the Revolving Credit Commitments then in effect and shall be accompanied by a prepayment of (yi) all Swingline Loans outstanding and (ii) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Revolving Credit Loans outstanding in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extentexcess, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total sum of (A) the Revolving Commitments as so reduced, provided that if Credit Loans and (B) the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof)then outstanding, over the Borrower shallRevolving Credit Commitments of all the Lenders, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loansas so reduced. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loanspursuant to this subsection 2.6(d) shall be accompanied by payment in full of all accrued interest thereon to and including the date of such prepayment on the amount prepaidprepayment, together with any additional amounts owing pursuant to subsection 2.

Mandatory Prepayments and Commitment Reductions. (a) If for at any reason time the Total Revolving Extensions sum of the Loans and the Letter of Credit Outstandings exceeds the lesser Commitments (including at any time after any reduction of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amountpursuant to Section 2.5), the Borrower shall immediatelymake a payment in the amount of such excess which payment shall be applied in the order set forth in Section 2.5(b). To the extent that after giving effect to any prepayment of the Loans required by the preceding sentence, prepay the applicable sum of the Loans and Letter of Credit Outstandings exceed the Commitments, the Borrower shall, without notice or demand, immediately cash collateralize the then outstanding L/C Obligations in an aggregate amount equal to such excessexcess upon terms reasonably satisfactory to the Administrative Agent. (b) [Reserved] (c) [Reserved] (d) If at any Indebtedness time the Borrower or any Subsidiary shall receive any cash proceeds of any casualty or condemnation in excess of $2,000,000 permitted by Section 8.6(c), such proceeds shall be incurred pursuant deposited with the Administrative Agent who shall hold such proceeds in a cash collateral account reasonably satisfactory to Section 7.2(h)it. From time to time upon request, an amount equal the Administrative Agent will release such proceeds to 100% the Borrower or such Subsidiary, as necessary, to pay for replacement or rebuilding of the Net Cash Proceeds thereof assets lost or condemned. If such assets are not replaced or rebuilt within one year (subject to reasonable extension for force majeure or weather delays) following the condemnation or casualty or if the Borrower fails to notify the Administrative Agent in writing on or before 180 days after such casualty or condemnation that the Borrower shall be immediately applied toward commence the prepayment replacement or rebuilding of such asset, then, in either case, the Administrative Agent may apply any amounts in the cash collateral account to the repayment of the Loans. (ec) Any reduction If the daily balance of cash and Cash Equivalents of the Revolving Commitments Borrower and its Domestic Subsidiaries for each day in any 179 consecutive day period is in excess of $30,000,000 in the aggregate, the Borrower shall be accompanied by prepayment of the Revolving Loans to the extentimmediately prepay in full all Loans, if any, then outstanding, and the Borrower agrees that the Total Revolving Extensions of Credit exceed the amount immediately after such prepayment and immediately after any repurchase or redemption of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereofSenior Unsecured Notes permitted under Section 8.18(b)(iv), the Borrower shall, to and its Domestic Subsidiaries shall have at least $5,000,000 in the extent aggregate of unrestricted cash and Cash Equivalents. (d) The provisions of this Section 2.10 shall not be in derogation of any other covenant or obligation of the balance of Credit Parties and their Subsidiaries under the Loan Documents and shall not be construed as a waiver of, or a consent to depart from, any such excess, cash collateralize on covenant or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaidobligation.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of Net Cash Proceeds from Capital Markets Transactions are received (x) the Total Revolving Commitments then in effect and other than from any Indebtedness permitted under Section 6.03 (y) the Maximum Permitted Outstanding Amount, the Borrower shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] other than paragraph (c)) [Reserved] (d) If by the Parent or any Indebtedness shall be incurred pursuant to Section 7.2(h)of its Subsidiaries, an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward on the prepayment date of such issuance or incurrence to the reduction of the LoansCommitments as set forth in Section 2.10(b); provided, that, notwithstanding the foregoing, in the event of any such issuance or incurrence by Subsidiaries of the Parent that are acquired or created in connection with the Acquisitions prior to the Whitewash Date or, as applicable, the date any other applicable Requirement of Law or contractual obligation that may limit the portion of any such Net Cash Proceeds received by such Subsidiary that may be distributed or advanced to the Parent is eliminated, except to the extent that the Net Cash Proceeds therefrom may be lawfully distributed or advanced to the Parent, such Net Cash Proceeds shall be maintained as cash or invested in Permitted Investments and shall be applied to such prepayment or reduction only upon the Whitewash Date or such other date. (eb) Any reduction Amounts to be applied in connection with reductions of the Commitments made pursuant to Section 2.10(a) shall be applied, without duplication, first, to reduce permanently the 364-Day Revolving Commitments, and second, to reduce permanently the Five-Year Revolving Commitments. To the extent that, after giving effect to any reduction thereof pursuant to this Section 2.10(b), the 364-Day Revolving Commitments shall be accompanied by prepayment of or the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Five-Year Revolving Commitments as so reduced, provided that if are less than the aggregate principal amount of the 364-Day Revolving Loans then outstanding is less than or the amount of such excess (because L/C Obligations constitute a portion thereof)Five-Year Revolving Loans, as the case may be, the Borrower shall, Parent shall prepay or cause to the extent of the balance of be prepaid such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) 2.10 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. Amounts to be applied pursuant to this Section shall be applied, first, to prepay ABR Borrowings, if applicable, and, second, to prepay Eurocurrency Borrowings. At the option of the Parent, amounts to be applied to prepay Eurocurrency Borrowings shall, if such prepayment would not occur on the last day of the relevant Interest Period, be deposited in the Prepayment Account (as defined below). The Administrative Agent shall apply any cash deposited in the Prepayment Account to prepay the relevant Eurocurrency Borrowings on the last day of the respective Interest Periods therefor (or, at the direction of the Parent, on any earlier date). For purposes of this Agreement, the term "Prepayment Account" shall mean an account established by the Parent with the Administrative Agent. The Administrative Agent will, at the request of the Parent, invest amounts on deposit in the Prepayment Account in Permitted Investments that mature prior to the last day of the applicable Interest Periods of the Eurocurrency Borrowings to be prepaid, provided that (i) the Administrative Agent shall not be required to make any investment that, in its sole judgment, would require or cause the Administrative Agent to be in, or would result in any, violation of any Requirement of Law and (ii) the Administrative Agent shall have no obligation to invest amounts on deposit in the Prepayment Account if a Default or Event of Default shall have occurred and be continuing. The Parent shall indemnify the Administrative Agent for any losses relating to the investments so that the amount available to prepay Eurocurrency Borrowings on the last day of the applicable Interest Periods therefor is not less than the amount that would have been available had no investments been made. Other than any interest earned on such investments, the Prepayment Account shall not bear interest. Interest or profits, if any, on such investments shall be deposited and reinvested and disbursed as described above. If the maturity of the Loans has been accelerated pursuant to Article 7, the Administrative Agent shall apply amounts on deposit in the Prepayment Account to prepay the Eurocurrency Borrowings.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, the Borrower BorrowerBorrowers shall immediately, prepay the applicable Loans in an aggregate amount equal to such excess. (b) [Reserved] (c) [Reserved] (d) If any Indebtedness shall be incurred pursuant to Section 7.2(h), an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower BorrowerBorrowers shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. (f) At any time during the Suspension Period and upon the occurrence of any of the following events, the BorrowerBorrowers shall prepay the Revolving Loans at par plus accrued and unpaid interest, in each case, on a dollar-for-dollar basis within one Business Day of receipt of such Net Cash Proceeds, in an amount equal to: (i) 100% of the Net Cash Proceeds of (a) any Disposition of assets (other than from (I) casualty or condemnation events, (II) any intercompany transfers, provided proceeds from transfers of assets from Loan Parties to non-Loan Parties will not be so excluded, (III) other Dispositions of assets not to exceed $50,000,000 in the aggregate for all such Dispositions, (IV) dispositions of worn out, surplus or obsolete equipment in the ordinary course of business and (V) Dispositions of assets the proceeds of which are to be applied to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof)) by the Parent Borrower or any of its Subsidiaries (or, in the case of any non-Wholly-Owned Subsidiary of the Parent Borrower, the applicable parent’s allocable share of such proceeds) and (b) any Designated Asset Sales. (ii) 100% of the Net Cash Proceeds of incurrences of Indebtedness of the Parent Borrower or its Subsidiaries other than (i) any intercompany Indebtedness of the Parent Borrower or any of its Subsidiaries, (ii) any re-financing of existing Indebtedness not increasing the existing amount (or commitments, if applicable) thereof in excess of the principal amount of the Indebtedness being refinanced, plus accrued interest, fees, premiums and refinancing expenses, (iii) Subscription Line Indebtedness, (iv) Indebtedness incurred pursuant to debt facility commitments in existence prior to the commencement of the Suspension Period (and not incurred in contemplation thereof) and any replacement or refinancing thereof not increasing the amount (or amount of commitments, as applicable) thereof and (v) Indebtedness to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof). (iii) 100% of the Net Cash Proceeds from the issuance of any Capital Stock by the REIT Entity (other than (A) issuances and settlements pursuant to employee stock plans or other benefit or employee incentive arrangements, (B) issuances of shares of capital stock or rights to Wholly-Owned Subsidiaries of the Parent Borrower, (C) issuances of shares of Capital Stock in connection with the conversion of convertible shares or units of such party outstanding as of the date hereof or otherwise issued in compliance with Section 5.01(c) of the Merger Agreement and (D) issuances to finance the acquisition of assets in respect of which the obligation to make such acquisition was incurred prior to the commencement of the Suspension Period (and was not incurred in contemplation thereof)).

Mandatory Prepayments and Commitment Reductions. (a) If for Upon receipt by any reason the Total Revolving Extensions Loan Party of, without duplication, (i) any Net Cash Proceeds arising from any Disposition of Credit exceeds the lesser of First-Priority Collateral (other than (x) the Total Revolving Commitments then Disposition of Inventory in effect and the ordinary course of business on ordinary business terms or (y) the Maximum Permitted Outstanding AmountDisposition of Collateral by any Loan Party to any Borrower), (ii) subject to Section 7.5 (d) and clause (d) of this Section 4.3, any proceeds from a Property Loss Event involving First-Priority Collateral or (iii) Extraordinary Receipts relating to First-Priority Collateral, the Borrower Borrowers shall immediately, immediately prepay the applicable Loans (or provide cash collateral in respect of Letters of Credit) in an aggregate amount equal to 105% of such excessproceeds. Any such Mandatory Prepayment shall be applied in accordance with clause (c) below. (b) [Reserved]To the extent not required by the Notes Indenture to redeem or otherwise repurchase the Secured Notes, subject to clause (d) of this Section 4.3, upon receipt by any Loan Party of (i) any Net Cash Proceeds arising from any Disposition of Second-Priority Collateral (other than (x) the Disposition of the Menominee Paper Machine or (y) the Disposition of Collateral by any Loan Party to any Borrower), (ii) subject to Section 7.5 (d) and clause (d) of this Section 4.3, any proceeds from a Property Loss Event involving Second-Priority Collateral, or (iii) Extraordinary Receipts relating to Second-Priority Collateral, the Borrowers shall immediately prepay the Loans (or provide cash collateral in respect of Letters of Credit) in an amount equal to 105% of such proceeds. Any such Mandatory Prepayment shall be applied in accordance with clause (c) below. (c) [Reserved] Any Mandatory Prepayments made by the Borrowers required to be applied in accordance with this clause (c) shall be applied (subject in the case of Mandatory Prepayments made with the proceeds from a Reinvestment Event to Section 7.5 (if applicable) and clause (d) If of this Section 4.3) as follows: first, to repay the outstanding principal balance of the Revolving Loans until the Revolving Line of Credit shall have been paid in full and then to provide cash collateral for any Indebtedness shall be incurred pursuant to Section 7.2(h), outstanding Letters of Credit or Letter of Credit Guaranties in an amount equal to 100105% of the face amount of the applicable Letters of Credit until all such Letters of Credit have been fully cash collateralized. All repayments of Revolving Loans required to be made pursuant to this clause (c) shall result in a permanent reduction of the Revolving Credit Commitments (and the Revolving Credit Commitments of each Lender shall be reduced by its Ratable Portion of such amount); provided, that, if such repayment was made from the Net Cash Proceeds thereof shall be immediately applied toward the prepayment of the Loans. (e) Any reduction of a Reinvestment Event, the Revolving Credit Commitments shall not be accompanied reduced by such prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance Reinvestment Deferred Amount of such excessReinvestment Event until the Reinvestment Prepayment Date corresponding thereto and, cash collateralize on such Reinvestment Prepayment Date, the Revolving Credit Commitments shall be reduced only to the extent of the Reinvestment Prepayment Amount applicable to such Reinvestment Event, if any; and provided, further, that, upon the occurrence of any Default or Event of Default on or prior before the Reinvestment Prepayment Date corresponding to such Reinvestment Event, the Revolving Credit Commitments shall be reduced by the entire Reinvestment Deferred Amount corresponding to such Reinvestment Event; and provided, further, however, that if any such repayment pursuant to this clause (c) was made from the Net Cash Proceeds of a Disposition of the type described in clause (c)(ii)(A)(vi) of Section 7.11, the Borrowers shall not be required to permanently reduce the Revolving Credit Commitments to the date extent such Disposition was permitted under such clause (c)(ii)(A)(vi) of Section 7.11. (d) Notwithstanding anything in clauses (a), (b) or (c) of this Section 4.3 to the contrary, if (i) any repayment under clause (c) of this Section 4.3 is required to be made in respect of a Reinvestment Event, (ii) such reduction Reinvestment Event constitutes a Property Loss Event and the insurance proceeds received by the Loan Parties in connection therewith do not exceed $600,000 (individually or in the manner described aggregate), or if such insurance proceeds exceed $600,000 (individual or in the aggregate), the applicable Loan Party shall have obtained the consent of the Agent in accordance with Section 3.97.5(d) or replace outstanding Letters of Credit. The application of any prepayment pursuant hereof, and (iii) the applicable Loan Party shall have delivered to Section 2.6 shall be made, first, to ABR Loans the Agent a Reinvestment Notice and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) Property Loss Event, shall have complied with the provisions of Section 7.5 of this Financing Agreement, then any such Mandatory Prepayment shall not be required to the extent of the Reinvestment Deferred Amount of such Reinvestment Event until the Reinvestment Prepayment Date corresponding thereto and, on such Reinvestment Prepayment Date, the applicable Loan required to be prepaid shall be accompanied by accrued interest so prepaid and reduced to the date extent of the Reinvestment Prepayment Amount applicable to such prepayment Reinvestment Event, if any; provided, however, that, upon the occurrence of any Event of Default on or before the amount prepaidReinvestment Prepayment Date corresponding to such Reinvestment Event, the Borrowers shall be required to prepay the Loans in accordance with clause (c) of this Section 4.3 by the entire Reinvestment Deferred Amount corresponding to such Reinvestment Event.

Mandatory Prepayments and Commitment Reductions. (a) If for any reason the Total Revolving Extensions of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding AmountOn or before November 30, the 2000, Borrower shall immediately, prepay make a mandatory prepayment of the applicable Loans Obligations in an amount sufficient to reduce the aggregate amount equal of the Obligations outstanding to such excessnot more than $17,000,000. (b) [Reservedintentionally omitted] (c) [Reservedintentionally omitted] (d) If Immediately upon the consummation of any Indebtedness shall be incurred pursuant to Section 7.2(hPermitted Disposition (other than an Ordinary Course Disposition), Borrower shall: (i) repay the Permitted Overadvance Amount outstanding (if any) as of the date of any such repayment in an amount equal to 100% the Required Amount applicable to such Permitted Disposition and the amount so prepaid shall permanently reduce the Permitted Overadvance Amount on a dollar-for-dollar basis; and (ii) if the Permitted Overadvance Amount outstanding (if any) has been repaid in full pursuant to clause (i) above or otherwise, repay Term Loan A in an amount equal to the Required Amount applicable to such Permitted Disposition (or the balance remaining after the repayment of the Permitted Overadvance Amount outstanding pursuant to clause (i) above, as applicable) and the amount so prepaid shall permanently reduce Term Loan A; and (iii) if the Permitted Overadvance Amount outstanding (if any) and Term Loan A have been repaid or prepaid in full pursuant to clauses (i) and (ii) above, prepay the Advances made by Foothill to Borrower under Section 2.1 in an amount equal to the Required Amount applicable to such Permitted Disposition (or the balance remaining after the prepayment of the Permitted Overadvance Amount outstanding and Term Loan A pursuant to clauses (i) and (ii) above, as applicable), and the amount so prepaid automatically shall permanently reduce the Maximum Revolving Amount, on a dollar-for-dollar basis. (e) On or before December 31, 2001, Borrower shall make an additional mandatory prepayment of the Obligations in an amount equal to $1,650,000; provided, however that if the amount of the Net Cash Proceeds thereof shall be immediately applied toward received by Foothill in connection with the prepayment consummation of the Loans. (e) Any reduction sale of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because LGeorgia Sale/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.Leaseback Properties exceeds $2,750,000,

Mandatory Prepayments and Commitment Reductions. (a) If If, for any reason fiscal year, commencing with the Total Revolving Extensions fiscal year ending December 31, 2000, there shall be Excess Cash Flow for the Borrower and its Restricted Subsidiaries, by May 31 of Credit exceeds the lesser of (x) the Total Revolving Commitments then in effect and (y) the Maximum Permitted Outstanding Amount, following fiscal year the Borrower shall immediately, prepay the applicable Loans in apply an aggregate amount equal to 50% of Excess Cash Flow for such excessprior fiscal year to the prepayment of the Loans and to the permanent reduction of the Revolving Credit Commitments in accordance with subsection 2.9(d). (b) [Reserved] If the Borrower or any of its Restricted Subsidiaries shall receive any net cash proceeds from the sale or other disposition of property, businesses or assets (cexcept for (i) [Reserved] sales or other dispositions of obsolete or worn out property and (dii) If any Indebtedness sales of inventory or other property in the ordinary course of business) and such proceeds are not used to purchase other assets within 12 months of receipt thereof, the Borrower shall be incurred pursuant to Section 7.2(h), apply an amount equal to 100% of the Net Cash Proceeds thereof shall be immediately applied toward portion of such net cash proceeds not so used to the prepayment of the Loans and to the permanent reduction of the Revolving Credit Commitments in accordance with subsection 2.9(d). (c) If the Borrower or any of its Restricted Subsidiaries shall receive any proceeds from any insurance on the property of the Borrower or its Restricted Subsidiaries (other than business interruption insurance), then the Borrower shall apply 100% of such proceeds, to the extent they are not reasonably promptly applied to the repair or replacement of the affected property to which such proceeds relate (or to the payment of taxes or other expenses related to such property or the repayment of any Indebtedness secured thereby), to the prepayment of the Loans and to the permanent reduction of the Revolving Credit Commitments in accordance with subsection 2.9(d). (d) Each prepayment of the Loans and permanent reduction of the Revolving Credit Commitments pursuant to this subsection shall be applied first, to the permanent repayment of the Term Loans (ratably among them in accordance with the respective aggregate then outstanding principal amounts thereof) in the inverse order of their scheduled maturities (except that any prepayment pursuant to subsection 2.9(b) shall be applied ratably to such remaining scheduled installments) and second, to the permanent reduction of the Revolving Credit Commitments and, to the extent required by subsection 2.4(c), to the prepayment of Revolving Credit Loans. Each such reduction of the Revolving Credit Commitments shall reduce, in inverse order, the mandatory reductions required on each Mandatory Reduction Date except that any such reduction of Revolving Credit Commitments pursuant to subsection 2.9(b) shall reduce pro rata the mandatory reductions then required on each remaining Mandatory Reduction Date. Each such prepayment shall be accompanied by payment of accrued interest on the amount prepaid plus any amounts payable pursuant to subsection 2.19. (e) Any Notwithstanding anything in this subsection to the contrary: (i) no prepayment of Loans or Revolving Credit Commitment reduction pursuant to either paragraph (b) or (c) above shall be required to be made until the last Business Day of December of the Revolving Commitments then current fiscal year of the Borrower or, if earlier, the date on which the aggregate of the amounts to be applied to such prepayment and/or reduction in such fiscal year as provided in such paragraphs (b) and (c) equals or exceeds $1,000,000, after which date all such amounts received during such fiscal year shall be accompanied applied to such prepayment and/or reduction as therein provided; and (ii) if the Borrower so elects by notice to the Administrative Agent no later than 15 Business Days prior to any date that a prepayment of Eurodollar Loans would be required to be made but for this clause (ii), no prepayment of Eurodollar Loans pursuant to this subsection shall be required to be made except on the Revolving last day(s) of the respective Interest Period(s) therefor in effect at the time such prepayments would otherwise be required to be made provided, that on any date that a prepayment of Eurodollar Loans would be required to be made but for this subsection the Borrower shall cash-collateralize such payment in a manner reasonably satisfactory to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the Total Revolving Commitments as so reduced, provided that if the aggregate principal amount of Revolving Loans then outstanding is less than the amount of such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the extent of the balance of such excess, cash collateralize on or prior to the date of such reduction (in the manner described in Section 3.9) or replace outstanding Letters of Credit. The application of any prepayment pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to Eurodollar Loans. Each prepayment of the Revolving Loans under Section 2.6 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaidAdministrative Agent.