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Cross default: Difference between revisions
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A cross default provision in an agreement allows a [[non-defaulting party]], on a [[default]] by the other party under any separate contract it may have entered for [[borrowed money]], to [[close out]] the agreement containing the cross default provision. Compare this with a [[cross acceleration]] provision, where the lender of the borrowed money must actually have taken steps to accelerate the borrowed money as a result of the default before the default becomes available as a termination right under the first agreement. | A cross default provision in an agreement allows a [[non-defaulting party]], on a [[default]] by the other party under any separate contract it may have entered for [[borrowed money]], to [[close out]] the agreement containing the cross default provision. Compare this with a [[cross acceleration]] provision, where the lender of the borrowed money must actually have taken steps to accelerate the borrowed money as a result of the default before the default becomes available as a termination right under the first agreement. | ||
Cross | Cross default is potentially a very damaging clause, as this picture to the right amply illustrates. Or would do, if there were a picture to the right. To the extent it doesn't: | ||
===Cross Default=== | ===Cross Default=== | ||