What Is the Difference Between Cross Default and Cross Acceleration
In Contrast to a Cross-Acceleration, a Cross-Default Clause in Agreement a Causes an Automatic Event of Default Under That Agreement When the Borrower Defaults...
In contrast to a cross-acceleration, a cross-default clause in Agreement A causes an automatic event of default under that agreement when the borrower defaults under Agreement B, even if the lender under Agreement B does not accelerate repayment.
What is cross-default and cross acceleration?
A cross-acceleration clause is similar to the cross-default clause, except that the debt under the other debt agreement must have been accelerated or otherwise been made to be due and payable in full prior to its stated maturity before the default under the credit agreement is triggered.
What does it mean to be cross defaulted?
Cross default is a provision in a bond indenture or loan agreement that puts a borrower in default if the borrower defaults on another obligation. For instance, a cross-default clause in a loan agreement may say that a person automatically defaults on his car loan if he defaults on his mortgage.
Alexander Ross has covered the video game industry for a decade, writing deep dives on game design, esports tournaments, VR developments, and gaming culture.
