Prepayment Waterfall Clause Samples
A Prepayment Waterfall clause defines the order and priority in which prepayments made on a loan or other financial obligation are distributed among various parties or tranches. Typically, this clause specifies that prepayments are first applied to certain senior debt holders before being allocated to more junior creditors or equity holders. For example, in a securitization structure, prepayments might be used to pay down the most senior class of notes before any funds reach subordinate classes. The core function of this clause is to ensure a clear and predictable allocation of prepayment funds, thereby managing risk and protecting the interests of priority stakeholders.
Prepayment Waterfall. Each prepayment under this Section 2.8(b)(iv) shall be applied in the manner set forth in the Prepayment Waterfall; provided, however, that:
(I) the Borrower shall be permitted to apply all or any part of the Net Proceeds of any prepayment event under this Section 2.8(b)(iv) as a repayment of Qualified Earlier Maturing Indebtedness in lieu of making such application pursuant to the Prepayment Waterfall; and
(II) to the extent that any prepayment made in reliance on clause (I) is not applied (or permitted to be applied) to the 2022 CMBS Secured Indebtedness, such prepayment shall be applied to the Qualified Earlier Maturing Indebtedness in direct order of maturity (it being understood for this purpose that the amount of any scheduled debt amortization payments shall be treated as debt maturing on the date such amortization payment is due). To extent that the Borrower does not apply such Net Proceeds to the payment of Qualified Earlier Maturing Indebtedness or otherwise in accordance with this clause (D), such unapplied Net Proceeds shall be applied to the principal prepayment of the Pari Passu Bank Debt and the Facilities in the manner set forth in the Prepayment Waterfall.
Prepayment Waterfall. Each prepayment under this Section 2.8(iv) shall be applied in the manner set forth in the Prepayment Waterfall.