Mandatory prepayment — Refinancing Sample Clauses

The "Mandatory prepayment — Refinancing" clause requires a borrower to use proceeds from any refinancing of existing debt to immediately repay outstanding amounts under the current loan agreement. In practice, if the borrower secures new financing to replace or restructure their debt, they must allocate the funds received from this refinancing to pay down the original loan, rather than using them for other purposes. This clause ensures that lenders are repaid promptly when the borrower obtains alternative funding, thereby reducing the lender's risk of non-payment and maintaining the priority of their claim on the borrower's assets.