Common use of Principal Amortization Clause in Contracts

Principal Amortization. Notwithstanding anything to the contrary contained in the Notes or any of the other Loan Documents, commencing on the first day of each month after the execution of this Agreement and on the first day of each month thereafter, Borrower will make a payment to Lender equal to the greater of (i) $50,000 or (ii) 100% of Cash Flow up to $100,000 plus 50% of Cash Flow above $100,000; provided, however, the monthly principal payment shall not exceed $183,000. Each such payment shall be applied as follows: (1) 50% to reduce the outstanding principal balance of the Eden Prairie Note, 30% to reduce the outstanding principal balance of the Merrillville Note and 20% to reduce the outstanding principal balance of the Middletown Note, or in such other order as shall be mutually agreed upon in writing by Borrower and Lender; and (2) upon payment in full of the Eden Prairie Note, Merrillville Note and Middletown Note, to reduce the principal balances of the other Notes in such order as Lender shall determine at its sole discretion. Each such principal payment shall be in addition to interest due on each such dates. The Cash Flow used to make the above payment calculation shall be the Cash Flow for the month which is two (2) months prior to the payment date. By example, the amount of Cash Flow used to calculate the payment due on October 1, 2002, will be that for the month of August 2002, with respect to which operating statements are to have been submitted to Lender by September 15, 2002, it being agreed that operating statements for each month will be submitted to Lender by the 15th day of the next month. -14-