Common use of Prepayments from Asset Sales Clause in Contracts

Prepayments from Asset Sales. If the Borrower or any Wholly-Owned Subsidiary of the Borrower receives any Material Sale Proceeds, then the Borrower shall prepay the Obligations, to the extent of such proceeds, promptly (but in any event within five Business Days) after the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or more; provided, however, that during the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid to the Agent pursuant to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on such date.

Prepayments from Asset Sales. If Upon receipt by the Borrower Company or any Wholly-Owned Subsidiary of the Borrower receives Company of Cash Proceeds of any Material Asset Sale Proceeds, then the Borrower shall prepay the Obligations, to the extent of such proceeds, promptly (but in any event within five Business Days) occurring after the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or more; provided, however, that during the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplicationClosing Date, (i) the cash Company or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) any assets, capital stock of any Subsidiary of the Company shall, or other tangible shall cause its Subsidiaries to, apply the Net Cash Proceeds of such Asset Sale to prepay (x) the term loans outstanding under the Senior Credit Facility or intangible property (y) revolving loans outstanding under the Senior Credit Facility; provided that the commitment thereunder is permanently reduced to the extent of the prepayment; and (ii) after the Conversion Date, the Company or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided any Subsidiary of the Company may apply any Net Cash Proceeds remaining after application pursuant to Section 9.13(c)clause (i) and having above to a Related Business. Concurrently with the consummation of an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving Asset Sale, the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid Company shall deliver to the Agent pursuant an Officer's Certificate demonstrating the derivation of Net Cash Proceeds from the gross sales price of such Asset Sale. To the extent not used as above, the Company shall, or shall cause its Subsidiaries to, prepay the Loans with the Net Cash Proceeds received from any Asset Sale on a date not later than the Business Day next succeeding (i) the third Business day after the receipt thereof if such date of receipt is on or prior to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less Conversion Date and (ii) the amount 270th day after the consummation of income taxes directly payable such Asset Sale if and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent that such proceeds Net Cash Proceeds are utilized in connection with not applied by the replacement thereof within 180 days of the sale Company or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a any Subsidiary of the Borrower as Company within 270 days to a result Related Business if such date of any legal or contractual restriction applicable to such Person existing on receipt is after the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 Conversion Date; provided that at such time as the terms Term Loan bears interest at the Fixed Rate, any such Net Cash Proceeds not so applied shall be used to make an offer to purchase the Term Loan from each Lender on a pro rata basis at 100% of the principal amount thereof are no more onerous plus accrued and unpaid interest thereon to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment date of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceedsrepurchase." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on such date.

Prepayments from Asset Sales. If Upon receipt by the Borrower Company or any Wholly-Owned Restricted Subsidiary of the Borrower receives Company of Cash Proceeds of any Material Asset Sale Proceedspermitted by Section 6.13, then the Borrower Company or any Restricted Subsidiary of the Company shall, or shall cause its Restricted Subsidiaries to, apply the Net Cash Proceeds of such Asset Sale (w) to prepay the Obligationsterm loans outstanding under the Senior Credit Facility, (x) to prepay revolving loans outstanding under the Senior Credit Facility; PROVIDED that except in the case of a prepayment of such revolving loans with the proceeds of a sale of Public Internet Investments, the commitment under the Senior Credit Facility is permanently reduced to the extent of the prepayment, (y) to prepay any other Senior Indebtedness or Subsidiary Guarantor Senior Indebtedness or (z) apply any Net Cash Proceeds remaining after application pursuant to clauses (w), (x) and (y) above to a Related Business. Promptly after the consummation of an Asset Sale, the Company shall deliver to the Agents an Officer's Certificate demonstrating the derivation of Net Cash Proceeds from the gross sales price of such Asset Sale. To the extent not used as above, the Company shall, or shall cause its Restricted Subsidiaries to, prepay the Loans with the Net Cash Proceeds received from any Asset Sale on a date not later than the Business Day next succeeding the 360th day after the consummation of such Asset Sale if and to the extent that such Net Cash Proceeds are not applied by the Company or any Restricted Subsidiary of the Company within 360 days as provided in the immediately preceding paragraph; PROVIDED that at such time as the Term Loan bears interest at the Fixed Rate, any such Net Cash Proceeds not so applied shall be used to make an offer to purchase the Term Loan from each Lender on a PRO RATA basis at 100% of the principal amount thereof plus accrued and unpaid interest thereon to the date of repurchase; PROVIDED, FURTHER, that if the Senior Subordinated Indenture requires the Company to make an offer to purchase Exchange Notes in connection with an Asset Sale, to the extent holders of Exchange Notes do not accept such proceeds, promptly (but in any event within five Business Days) after offer the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or more; provided, however, that during the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including Company will apply any Net Awards and Net Cash Proceeds required to be paid to the Agent pursuant to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated accepted by the Borrower in writing holders of Exchange Notes to prepay the Agent as being excluded from Loans. Notwithstanding the prepayment requirements foregoing provisions of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower mayparagraph, so long as no Potential Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account no mandatory repayments shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment required pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale paragraph until the date on which the aggregate Net Cash Proceeds received on such datefrom all Asset Sales not reinvested within the time periods specified by this paragraph equal or exceed $5 million.

Prepayments from Asset Sales. If the Borrower or any Wholly-Owned Subsidiary of the Borrower receives any Material Sale Proceeds, then the Borrower shall prepay the Obligations, to the extent of such proceeds, promptly (but in any event within five Business Days) after the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or more; provided, however, that during the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-sale- leaseback transaction) of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid to the Agent pursuant to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) the Loans and the indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) belowAssets), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds F) proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 7525% Portion and Portion; (yH) proceeds from the amount cancellation of the German Financing Portion, if any, Intercompany Note upon the consummation of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) aboveSubsidiary Transfer; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, ; (KJ) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents Documents; or (LK) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on such date.

Prepayments from Asset Sales. If the Borrower Upon receipt by Holding or any Wholly-Owned Subsidiary of its Subsidiaries of Cash Proceeds from Asset Sales in excess of $1,000,000 in the Borrower receives any Material Sale Proceedsaggregate, then measured on a cumulative basis from the Restatement Effective Date, Borrower shall prepay the ObligationsLoans in an amount equal to Estimated Net Cash Proceeds of such Asset Sales on the date of the receipt of Cash Proceeds of Asset Sale which causes the aggregate Cash Proceeds from Asset Sales to equal or exceed $1,000,000 in the manner specified in subsection 2.5A(iii) and, on the 30th day after receipt of such Cash Proceeds, Borrower shall make an additional prepayment of the Loans in the manner specified in subsection 2.5A(iii) in an amount equal to the extent excess, if any, of Net Cash Proceeds of Asset Sale over Estimated Net Cash Proceeds of such proceedsAsset Sale; and, promptly within one (1) Business Day of the receipt of any cash payment on any note constituting Net Cash Proceeds of Asset Sale, Borrower shall prepay the Loans in the manner specified in subsection 2.5A(iii) in an amount equal to such additional Net Cash Proceeds of Asset Sale; provided that, nothing in this subsection 2.5A(ii)(a) shall be construed to permit any such sale, financing or other disposition other than as otherwise expressly permitted by this Agreement unless otherwise approved by Requisite Lenders in writing; provided further that, concurrently with the making of any prepayment pursuant to this subsection 2.5A(ii)(a), Borrower shall deliver an Officers' Certificate demonstrating the derivation of Net Cash Proceeds of Asset Sale from the gross sales price of any correlative Asset Sale. Notwithstanding anything to the contrary contained in this subsection 2.5A(ii)(a), but provided that no Event of Default or Potential Event of Default has occurred and is continuing, in the event any event within five Business Days) after prepayment pursuant to this subsection, which is applied in accordance with the first date on provisions of subsection 2.5A(iii), would result in the incurrence by Borrower of liability pursuant to subsection 2.7E(ii), Borrower shall be permitted to retain and shall not be required to make a prepayment in respect of that portion of the Cash Proceeds from Asset Sales which would result in the incurrence of such Persons have received Material Sale Proceeds totaling an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or moreliability; provided, however, that during Borrower shall, on the pendency last day of each subsequent Interest Period, make prepayments, in an Event aggregate amount not to exceed the aggregate amount of Default all Material Cash Proceeds from Asset Sales Proceeds shall retained by Borrower pursuant to this sentence, to the extent such prepayments do not result in the incurrence of liability pursuant to subsection 2.7E(ii). In the event that Holding or the applicable Subsidiary reasonably expects the proceeds of a sale of equipment of Holding or such Subsidiary to be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting reinvested within 180 days from the salereceipt of Cash Proceeds in similar productive assets used or useable in the business of Holding or such Subsidiary, issuance then Borrower shall either (y) deliver cash in an amount equal to the Estimated Net Cash Proceeds of such sale or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required portion thereof expected to be paid reinvested to Administrative Agent to be held by Administrative Agent as collateral in accordance with the Agent pursuant to terms of this paragraph or (z) prepay Working Capital Loans and reduce the Working Capital Loan Commitments in accordance with the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable immediately succeeding paragraph. Upon Borrower's request and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have has occurred and be is continuing, withdraw funds from Administrative Agent shall release such account proceeds or a portion thereof to pay Borrower for reinvestment as described above. In the event Borrower fails to reinvest such Cash Proceeds on or reimburse itself for prior to the end of the applicable 180-day period, Administrative Agent shall apply such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date amount as a prepayment pursuant to this Section subsection 2.5A(ii)(a) and Sections 3.5 it shall be applied in the order set forth in subsection 2.5A(iii). In the event that Borrower elects to prepay Working Capital Loans in accordance with clause (z) of the immediately preceding paragraph, Borrower shall prepay Working Capital Loans and 3.6 as if constituting Material Sale reduce the Working Capital Loan Commitments by the amount of the Estimated Net Cash Proceeds received of such sale or the portion thereof expected to be reinvested; provided, that upon reinvestment in accordance with the terms of the immediately preceding paragraph, the reduction in the Working Capital Loan Commitment shall be decreased by the amount of such reinvestment. In the event Borrower fails to reinvest all of such Cash Proceeds in accordance with the terms of the immediately preceding paragraph on or prior to the end of the applicable 180-day period, the reduction in Working Capital Loan Commitments in the aggregate amount of such dateCash Proceeds not reinvested shall automatically be permanent and final.

Prepayments from Asset Sales. If Upon receipt by the Borrower Company or any Wholly-Owned Restricted Subsidiary of the Borrower receives Company of Net Cash Proceeds of any Material Asset Sale permitted by Section 6.10, the Company or any Restricted Subsidiary of the Company shall, or shall cause its Restricted Subsidiaries to, apply the Net Cash Proceeds of such Asset Sale within 365 days of receipt thereof (v) in the case of the receipt by any Restricted Subsidiary (but not by the Company) of Net Cash Proceeds of any Asset Sale, to repay Indebtedness under any Qualified Containers Indebtedness or to repay Indebtedness under the Credit Agreement; (w) to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Company; (x) to acquire Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary that is engaged in a Permitted Business; (y) to acquire or make an investment in property, plant, equipment or other non-current assets that replace the properties and assets that were the subject of such Asset Sale or that will be used or useful in the Permitted Business (including expenditures for maintenance, repair or improvement of existing properties and assets); or (z) a combination of repayment and investment permitted by the foregoing clauses (v), (w), (x) and (y). Pending the final application of Net Cash Proceeds, then the Borrower Company or its Restricted Subsidiaries, as the case may be, may temporarily reduce revolving credit borrowings or invest such Net Cash Proceeds in Cash Equivalents. To the extent not used as above, the Company shall, or shall cause its Restricted Subsidiaries to, prepay the ObligationsInterim Loan (an "ASSET SALE PREPAYMENT"), all on a pro rata basis, with the Net Cash Proceeds received from any Asset Sale on a date not later than the Business Day next succeeding the 365th day after the consummation of such Asset Sale if and to the extent of such proceeds, promptly (but in any event within five Business Days) after the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or more; provided, however, that during the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid to the Agent pursuant to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to Net Cash Proceeds are not applied by the Company or any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Restricted Subsidiary of the Borrower Company within 365 days as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (the immediately preceding paragraph or such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portionearlier date, if any, as the Board of any Material Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale Proceeds as provided set forth in clause clauses (Hv), (w), (x) below; (Hy) ten percent or (10%z) of the Material Sale Proceeds received by StoneCanada resulting from preceding paragraph. Notwithstanding the sale or other disposition foregoing provisions of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amountthis paragraph, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a no mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) repayments shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment required pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale 2.4A(ii) until the date on which the aggregate Net Cash Proceeds received on such datefrom all Asset Sales not applied in accordance with clauses (v), (w), (x), (y) or (z) of the preceding paragraph within the time periods specified by this paragraph equal or exceed $20.0 million.

Prepayments from Asset Sales. If No later than the Borrower first (1st) Business Day following the date of receipt by the Parent, the Company or any Wholly-Owned Subsidiary of its Subsidiaries of Cash Proceeds of any Asset Sale, the Borrower receives any Material Sale Proceeds, then the Borrower Company shall prepay the ObligationsTerm Loans in an amount equal to the Net Cash Proceeds received; provided that (I) if the Company shall have delivered a Reinvestment Notice to the Administrative Agent no later than one (1) Business Day after the consummation of such Asset Sale (other than Asset Sales described in Schedule 7.7 annexed hereto) and no Default or Event of Default exists at the time of such consummation or delivery of such notice, the Company shall not be required to make any prepayment with the proceeds of such Asset Sale to the extent that (x) all or any portion of such proceeds are reinvested in Reinvestment Assets within two hundred seventy (270) days from the date of receipt of such proceeds, promptly and (but in any event within five Business Daysy) after giving effect thereto, the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount of proceeds (other than (1) Permitted Testing Center Proceeds, and (2) proceeds of Asset Sales described in Schedule 7.7 annexed hereto in an amount not to exceed $5 million or more 5,000,000) not used to make mandatory prepayments of Term Loans pursuant to this proviso and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of the corresponding proviso to subsection 2.4B(iii)(d) shall not exceed $5 million or more; provided, however, that during the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting 10,000,000 measured on a cumulative basis from the sale, issuance or other disposition Closing Date; (II) if at any time the aggregate amount of Net Cash Proceeds (including, without limitation, by a sale-leaseback transactionPermitted Testing Center Proceeds) in respect of which Reinvestment Notices have been delivered and which have not yet been reinvested in Reinvestment Assets or used to repay Loans shall exceed $10,000,000, then the Borrower shall promptly deliver all such Net Cash Proceeds (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") including the portion not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving 10,000,000) to the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required Agent to be paid to the Agent pursuant to held and applied by it in accordance with the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets Collateral Account Agreement; and (2III) any indebtedness related on each Reinvestment Prepayment Date, an amount equal to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance Reinvestment Prepayment Amount with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to relevant Reinvestment Event shall be applied to a purpose specified in a legal instrument applicable prepay the Term Loans. Concurrently with any prepayment of Loans pursuant to such Assets or from this subsection 2.4B(iii)(a), the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject Company shall deliver to the limitations provided Administrative Agent an Officer's Certificate demonstrating in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation detail reasonably satisfactory to the AgentAdministrative Agent the derivation of the Net Cash Proceeds of the correlative Asset Sale from the gross sales price thereof. During In addition, in the period ending on event that the 180th day Company shall, at any time after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no any Reinvestment Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as requiring a prepayment pursuant to this Section subsection 2.4B(iii)(a), determine that the prepayments previously made in respect of such Reinvestment Event were in an aggregate amount less than that required by the terms of this subsection 2.4B(iii)(a), the Company shall promptly cause to be made an additional prepayment of the Term Loans in an amount equal to the amount of any such deficit, and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on the Company shall concurrently therewith deliver to the Administrative Agent an Officer's Certificate demonstrating the derivation of the additional proceeds resulting in such datedeficit.

Prepayments from Asset Sales. If Upon receipt by the Borrower Company or any Wholly-Owned Restricted Subsidiary of the Borrower receives Company of Cash Proceeds of any Material Asset Sale Proceedspermitted by Section 6.12, then the Borrower Company or any Restricted Subsidiary of the Company shall, or shall cause its Restricted Subsidiaries to, apply the Net Cash Proceeds of such Asset Sale (w) to prepay the Obligationsterm loans outstanding under the Credit Agreement, (x) to prepay revolving loans outstanding under the Credit Agreement; provided that the commitment under the Credit Agreement is permanently reduced to the extent of such proceedsthe prepayment, promptly (but in y) to prepay any event within five Business Daysother Senior Debt or Guarantor Senior Debt or (z) apply any Net Cash Proceeds remaining after the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount application pursuant to clauses (w), (x) and (y) above to a Permitted Line of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or moreBusiness; provided, howeverthat with respect to the Disposition, that during the pendency Company may apply up to $20.0 million of Net Cash Proceeds to prepay revolving loans under the Credit Agreement without a permanent reduction of the commitment thereunder and shall apply the balance pursuant to clause (w). Promptly after the consummation of an Event of Default all Material Sales Proceeds Asset Sale, the Company shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid deliver to the Agent pursuant an Officers' Certificate demonstrating the derivation of Net Cash Proceeds from the gross sales price of such Asset Sale. To the extent not used as above, the Company shall, or shall cause its Restricted Subsidiaries to, prepay the Floating Rate Loans and make offers to repurchase the Fixed Rate Loans and the Exchange Notes, all on a pro rata basis, with the Net Cash Proceeds received from any Asset Sale on a date not later than the Business Day next succeeding the 365th day after the consummation of such Asset Sale if and to the terms extent that such Net Cash Proceeds are not applied by the Company or any Restricted Subsidiary of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) Company within 365 days as provided in the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (immediately preceding paragraph; provided that the offers to repurchase Fixed Rate Loans and Exchange Notes shall be at 100% of the principal amount thereof plus accrued and unpaid interest thereon (in cash) to the date of repurchase; provided, further, that to the extent holders of Fixed Rate Loans or Exchange Notes do not accept such income taxes, costs and expenses attributable to offer the Company will apply any subsequent conversion, exchange or other receipt of Monetized Assets shall Net Cash Proceeds not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured accepted by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding holders (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt prepay additional amounts of Monetized Assets Floating Rate Loans and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days additional Net Cash Proceeds remain after application of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect 1), to Material Sale Proceeds received by Stone- Canadapurchase additional Fixed Rate Loans or Exchange Notes, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from case may be, which were tendered for repurchase and not accepted. Notwithstanding the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements foregoing provisions of this Section (any amount so designated being "Excluded Sale Proceeds")paragraph, with after the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower mayConversion Date, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account no mandatory repayments shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment required pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale paragraph until the date on which the aggregate Net Cash Proceeds received on such datefrom all Asset Sales not reinvested within the time periods specified by this paragraph equal or exceed $5.0 million.

Prepayments from Asset Sales. If (i) On or prior to the Borrower Conversion Date, upon receipt by the Company or any Wholly-Owned Subsidiary of the Borrower receives Company of Net Cash Proceeds of any Material Asset Sale Proceedsoccurring after the Closing Date, then the Borrower shall Company or any Subsidiary of the Company will use the Net Cash Proceeds of such Asset Sale to prepay the ObligationsBank Facility (or, in the case of Net Cash Proceeds from Asset Sales of assets of the Acquired Business, the Target Facility) and permanently reduce any commitments thereunder to the extent of the prepayment. Concurrently with the consummation of an Asset Sale, the Company shall deliver to the Agent an Officer’s Certificate demonstrating the derivation of Net Cash Proceeds from the gross sales price of such proceedsAsset Sale. To the extent not used as above, promptly (but in the Company shall, or shall cause its Subsidiaries to, prepay the Loans with the Net Cash Proceeds received from any event within five Asset Sale on a date not later than the Business Days) Day next succeeding the 90th day after the consummation of such Asset Sale if and to the extent that such Net Cash Proceeds are not applied by the Company or any Subsidiary of the Company within 90 days as provided in the first date sentence of this paragraph. (ii) After the Conversion Date, upon the consummation of an Asset Sale, the Company may apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either (x) to permanently reduce Indebtedness under the Bank Facility (or, in the case of Net Cash Proceeds from Asset Sales of assets of the Acquired Business, the Target Facility); and, in the case of any such Indebtedness, effect a permanent reduction in the availability under the Bank Facility (or the Target Facility), (y) to make an investment in properties and assets (including Capital Stock) that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the Company and its Restricted Subsidiaries as existing on which the Closing Date or in businesses reasonably related thereto (“Replacement Assets”); and/or (z) a combination of prepayment and investment permitted by the foregoing clauses (x) and (y). (iii) Pending the final application of such Persons have received Material Net Cash Proceeds, the Company may temporarily reduce borrowings under the Bank Facility or any other revolving credit facility. On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds totaling an relating to such Asset Sale as set forth in clauses (x), (y) and (z) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of $5 million Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (x), (y) and (z) of the preceding paragraph (each a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds Offer”) to all Lenders on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Lenders on a pro rata basis, that amount of Loans equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Loans to be purchased, plus accrued and within five Business Days after each unpaid interest thereon, if any, to the date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or morepurchase; provided, however, that during if at any time any non-cash consideration received by the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand Company or any Restricted Subsidiary of the Agent. "Material Sale Proceeds" meansCompany, without duplicationas the case may be, (i) the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid to the Agent pursuant to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale any Asset Sale is converted into or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; for cash (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds other than interest received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to any such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Whollynon-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(ccash consideration), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale then such conversion or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds constitute an Asset Sale hereunder and the Discretionary Funds BasketNet Cash Proceeds thereof shall be applied in accordance with this Section 2.5(a)(2)(A). The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $25.0 million, in each case resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and with not just the remaining portion amount in excess of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower$25.0 million, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account applied as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment required pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on such date2.5(a)(2)(A)).

Prepayments from Asset Sales. If At any time prior to the Borrower date which is 364 days following the date of receipt of such Net Cash Proceeds from an Asset Sale by any Loan Party or any Wholly-Owned Subsidiary of the Borrower receives any Material Sale Proceeds, then the Borrower shall prepay the Obligations, to the extent of such proceeds, promptly (its Subsidiaries but in any event within five Business Days) after not later than the first date day before the day on which such Persons have received Material Sale Proceeds totaling an aggregate the Company shall be obligated to pay any amount of $5 million such Net Cash Proceeds (or more and within five Business Days after each date thereafter when other amount determined by reference to such Persons have received additional Material Sale Net Cash Proceeds) to satisfy all or part of any other obligation that may become due by reason of such sale or other disposition other than any Indebtedness secured by the assets from which such Net Cash Proceeds totaling an aggregate were derived, the Company may spend all or any part of $5 million Net Cash Proceeds (or moreother amount determined by reference to such Net Cash Proceeds) on a Renovation or Restoration permitted hereunder or otherwise invest such amounts in property or assets used in a Hospitality-Related Business; provided, however, provided that during the pendency of if an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting from a failure to pay principal or interest hereunder has occurred and is continuing, the sale, issuance or other disposition Company shall not use any part of such Net Cash Proceeds to make any capital expenditures for any purpose (including, without limitation, by the investment of any amount in any property or assets used in a saleHospitality-leaseback transactionRelated Business, but excluding the purchase of FF&E and expenditures in furtherance of any Renovation or Restoration of any Property (including any Property that is not a Mortgaged Property) that shall have commenced before the occurrence of such Event of Default and that cannot be terminated without material cost to the Company or a material adverse effect on the Property) unless and until the Company shall have prepaid the Loans in the amounts required by, and in accordance with the provisions of, the sentence next following. Any amounts not expended in accordance with the preceding sentence at the earlier of (Ai) any assets, capital stock the day before 203 the day on which the Company is obligated to apply such amounts to satisfy all or part of any Subsidiary other obligation that may become due by reason of such sale or other tangible disposition, other than any Indebtedness secured by the assets from which such Net Cash Proceeds were derived, or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid to the Agent pursuant to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided date that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other is 365 days after the receipt of Monetized Assets such Net Cash Proceeds, shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from prepay the payment of business interruption insurance; (F)proceeds resulting from Loans and the sale or other disposition of Assets between the Borrower Revolving Loan Commitments shall be automatically and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received permanently reduced by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of such prepayments. Concurrently with any prepayments prepayment of the Indebtedness incurred in Loans pursuant to this subsection 2.5B(v), the German Financing with Company shall deliver to the German Financing Abitibi Portion, if any, Agent an Officer's Certificate demonstrating the derivation of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, Net Cash Proceeds. Any mandatory prepayments pursuant to the terms and conditions of the German Financing, required to this subsection 2.5B(v) shall be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred applied as specified in the German Financing, provided that the remaining portion of the Material Sale subsection 2.5(B)(ix). Net Cash Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other more than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) one Property shall be included within deemed expended in the meaning of "Material Sale Proceeds." Proceeds described order in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after which such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt of such proceeds amounts were received by the Borrower applicable Loan Party or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on such dateSubsidiary.

Prepayments from Asset Sales. If Upon receipt by the Borrower Parent, the Company or any Wholly-Owned Subsidiary of their Subsidiaries of Cash Proceeds of any Asset Sale occurring after the Borrower receives any Material Sale ProceedsClosing Date, then the Borrower Company shall prepay the Obligations, to the extent of such proceeds, promptly (but in any event within five Business Days) after the first date on which such Persons have received Material Sale Proceeds totaling an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or more; provided, however, that during the pendency of an Event of Default all Material Sales Proceeds shall be payable upon the demand of the Agent. "Material Sale Proceeds" means, without duplication, (i) the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) of (A) first, the Additional Loan (including any assets, capital stock of any Subsidiary or other tangible or intangible property or rights amounts outstanding under the Additional Senior Note) (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)together with accrued interest) and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property second, the Term Loan (and including any amounts outstanding under the Senior Note), with the Net Awards and Net Cash Proceeds required to be paid to received from such Asset Sale, in the Agent case of Asset Sales pursuant to the terms clause (a) of the Mortgages) or (C) any securitiesdefinition thereof, instruments or concurrently with the consummation of such Asset Sale, and with respect to all other rights Asset Sales, on a date not later than the Business Day next succeeding the earlier of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required the 30th day after consummation of such Asset Sale unless prior to such date, the Parent, the Company or any such Subsidiary has entered into a firm order or commitment for the purchase of an asset or assets which shall be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets used in the Business and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds 90th day after the consummation of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to such Asset Sale if and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent that such proceeds Net Cash Proceeds are utilized in connection with not applied by the replacement thereof within 180 days of Parent, the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower Company or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect their Subsidiaries to such Assets provided such proceeds are used for the replacement of such Assets asset or are required to assets with an asset or assets useful in the Business. In each case, such new asset shall be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect Security Interest of the Security Documents to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein the same extent as the "Excluded asset subject to such Asset Sale Proceeds Basket") of net proceeds from the sale or otherwise owned by a Loan Party or other disposition member of Assets not constituting (1) Abitibi Shares, (2) the capital Group whose stock is pledged by a member of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided the Group pursuant to Section 9.13(c)a Pledge Agreement. Concurrently, designated by with the Borrower in writing consummation of an Asset Sale, the Company shall deliver to the Agent as being excluded an Officer's Certificate demonstrating the derivation of Net Cash Proceeds from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Agent to be held in an account as security for the Obligations pursuant to documentation satisfactory to the Agent. During the period ending on the 180th day after receipt gross sales price of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on such dateAsset Sale.

Prepayments from Asset Sales. If the Borrower Upon receipt by Company or any Wholly-Owned Subsidiary of Company of Net Cash Proceeds of any Asset Sale occurring after the Borrower receives any Material Sale ProceedsClosing Date (other than Net Cash Proceeds from the sale or issuance of Capital Stock of Express Online or Practice Patterns Science which shall be treated as Net Securities Proceeds under subsection 2.5A(ii)(c)), then the Borrower Company shall, or shall cause its Subsidiaries to, prepay the ObligationsLoans with the Net Cash Proceeds received from such Asset Sale on a date not later than the Business Day next succeeding (i) in the case the date of consummation of such Asset Sale is prior to the Conversion Date, the 180th day after the date of consummation of such Asset Sale if and to the extent that such Net Cash Proceeds are not applied by such date by Company or its Subsidiaries to either repay any Indebtedness outstanding under the Senior Secured Credit Agreement or to make an investment in properties and assets that replace the properties and assets that were the subject of such proceeds, promptly Asset Sale or in properties and assets that will be used in the business of Company and its Subsidiaries as existing on the Closing Date or in businesses which are similar or related to the businesses of Company as conducted on the Closing Date (but "Replacement Assets") and (ii) in any event within five Business Days) the case the date of consummation of such Asset Sale is on or after the first Conversion Date, the 360th day after the date on which of consummation of such Persons have received Material Asset Sale if and to the extent that such Net Cash Proceeds totaling are not applied by such date by Company or its Subsidiaries to either repay any Indebtedness outstanding under the Senior Secured Credit Agreement or to make an aggregate amount of $5 million or more and within five Business Days after each date thereafter when such Persons have received additional Material Sale Proceeds totaling an aggregate of $5 million or moreinvestment in Replacement Assets; provided, however, that during that, to avoid any imposition of any costs pursuant to subsection 2.7D, in lieu of prepaying the pendency of an Event of Default all Material Sales Proceeds shall be payable upon Loans on any such date, Company may elect not to prepay the demand of the Agent. "Material Sale Proceeds" means, without duplication, Loans by (i) so notifying the cash or cash equivalent proceeds or marketable securities resulting from the sale, issuance or other disposition (including, without limitation, by a sale-leaseback transaction) Administrative Agent in writing of (A) any assets, capital stock of any Subsidiary or other tangible or intangible property or rights (collectively, "Assets") not constituting CP&L Property, Monetized Assets, Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)) such election and having an aggregate fair market value in excess of $1 million for each separate transaction or series of related transactions involving the same seller, (B) any Collateral or Mortgaged Property (and including any Net Awards and Net Proceeds required to be paid to the Agent pursuant to the terms of the Mortgages) or (C) any securities, instruments or other rights of any kind which are convertible into, exchangeable for or otherwise entitled to receive any Monetized Assets, less (ii) the paying such amount of income taxes directly payable and any direct costs or expenses incurred in connection with such sale or disposition (provided that such income taxes, costs and expenses attributable Net Cash Proceeds to any subsequent conversion, exchange or other receipt of Monetized Assets shall not be deducted for purposes of determining Material Sale Proceeds), less (iii) the amount of indebtedness secured by such Assets that are sold or otherwise disposed of, which indebtedness is required to be and is repaid upon such sale (but excluding (1) indebtedness required to be repaid upon any subsequent conversion, exchange or other receipt of Monetized Assets and (2) any indebtedness related to the German Financing that is repaid as contemplated in clause (H) below), but Material Sales Proceeds shall not include: (A) proceeds of inventory sold or otherwise disposed of in the ordinary course of business; (B) subject to the giving of notice to and deposit of funds with the Agent as provided below, proceeds of Assets not constituting (1) Monetized Assets or (2) Collateral or Mortgaged Property (unless Substitute Collateral has been provided pursuant to Section 9.13(c)), sold or exchanged to the extent such proceeds are utilized in connection with the replacement thereof within 180 days of the sale or exchange of such assets; (C) proceeds of Permitted Investments; (D) proceeds received by a Person which cannot be remitted to the Borrower or a Subsidiary of the Borrower as a result of any legal or contractual restriction applicable to such Person existing on the Closing Date and identified on Schedule 3.4 hereto and any legal or contractual restriction contained in any Indebtedness which refinances any Indebtedness referenced on Schedule 3.4 provided that the terms thereof are no more onerous to the Borrower or any Subsidiary than those existing on the Closing Date; (E) proceeds resulting from the payment of insurance with respect to such Assets provided such proceeds are used for the replacement of such Assets or are required to be applied to a purpose specified in a legal instrument applicable to such Assets or from the payment of business interruption insurance; (F)proceeds resulting from the sale or other disposition of Assets between the Borrower and any Wholly-Owned Subsidiary (other than a Restricted Subsidiary) of the Borrower or between any Wholly-Owned Subsidiaries (other than Restricted Subsidiaries) of the Borrower; (G) subject to the limitations provided in clause (H) below with respect to Material Sale Proceeds received by Stone- Canada, up to an aggregate amount of $300 million (such amount being referred to herein as the "Excluded Sale Proceeds Basket") of net proceeds from the sale or other disposition of Assets not constituting (1) Abitibi Shares, (2) the capital stock of Stone Snowflake as permitted by Section 5.2.12(vi) and (3) Collateral or Mortgaged Property or Assets constituting Collateral or Mortgaged Property for which Substitute Collateral has been provided pursuant to Section 9.13(c), designated by the Borrower in writing to the Agent as being excluded from the prepayment requirements of this Section (any amount so designated being "Excluded Sale Proceeds"), with the Excluded Sale Proceeds Basket being subject to reduction by (x) the amount of the Abitibi 75% Portion and (y) the amount of the German Financing Portion, if any, of any Material Sale Proceeds as provided in clause (H) below; (H) ten percent (10%) of the Material Sale Proceeds received by StoneCanada resulting from the sale or other disposition of Assets (other than Abitibi Shares) of Stone- Canada in an aggregate amount, when combined with the aggregate amount of any prepayments of the Indebtedness incurred in the German Financing with the German Financing Abitibi Portion, if any, of the Abitibi 75% Portion as permitted under clause (I) of Section 5.2.12(v), not to exceed the Dollar equivalent of DM 80,000,000 so long as such portion of the Material Sale Proceeds (such portion being referred to herein as the "German Financing Portion") are, pursuant to the terms and conditions of the German Financing, required to be used, and are promptly used directly or indirectly, to repay the Indebtedness incurred in the German Financing, provided that the remaining portion of the Material Sale Proceeds are promptly used as a mandatory prepayment under this Section 3.4(c) to repay the Obligations promptly upon receipt by Stone-Canada, with the German Financing Portion of the Material Sale Proceeds being deemed to be a utilization of the Excluded Sale Proceeds Basket until such time, and to the extent, that the Excluded Sale Proceeds Basket has been reduced to zero (provided that the German Financing Portion of the Material Sale Proceeds shall not be deemed to be Excluded Sales Proceeds for purposes of determining Discretionary Funds and the Discretionary Funds Basket), and with the remaining portion of the Material Sale Proceeds not being eligible to be designated by the Borrower as Excluded Sale Proceeds under clause (G) above; (I) proceeds from the sale or other disposition of the Stone-Canada Intercompany Note to any Person other than to the Borrower or any Affiliate of the Borrower, (J) proceeds from any Abitibi Sale/Monetization, (K) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness under the First Mortgage Note Documents or (L) proceeds from the sale or other disposition of any Assets constituting collateral which secures the Indebtedness incurred pursuant to Section 5.2.2.(x) but only to the extent such proceeds are promptly used to repay such Indebtedness. The cash, cash equivalent proceeds or marketable securities resulting from the repayment or other liquidation of the investments permitted by Section 5.2.7(i) shall be included within the meaning of "Material Sale Proceeds." Proceeds described in subpart (B) of the exclusion from the definition of Material Sale Proceeds shall be so excluded only if, within five (5) Business Days after such proceeds are received, the Borrower gives the Agent written notice of its intent to utilize such proceeds for replacement purposes and (to the extent such proceeds have not already been so utilized) delivers such proceeds to the Administrative Agent to be held in an account as security Cash collateral for the Obligations pursuant and applied to documentation satisfactory such prepayment of the Loans at the end of the applicable Interest Period in accordance with the term of this Agreement. Concurrently with the consummation of an Asset Sale, Company shall deliver to Administrative Agent an Officers' Certificate demonstrating the Agent. During derivation of Net Cash Proceeds from the period ending on the 180th day after receipt gross sales price of such proceeds by the Borrower or one of its Subsidiaries, the Borrower may, so long as no Event of Default or Unmatured Event of Default shall have occurred and be continuing, withdraw funds from such account to pay or reimburse itself for such replacement costs. Funds in such account shall be held and invested in the manner prescribed for Deposited Monies pursuant to Section 3.5. All amounts remaining in such account at the conclusion of such 180 day period shall, subject to Section 3.6(f), be applied on such date as a prepayment pursuant to this Section and Sections 3.5 and 3.6 as if constituting Material Sale Proceeds received on such dateAsset Sale.