Cross-Default Clause (Event of Default) (Credit Agreement)

Summary

This clause is a cross acceleration. Cross acceleration is an event of default, and such clauses are typically found in indentures and investment-grade credit agreements. Cross-default clauses are more commonly found in credit agreements. This clause contains practical guidance and drafting notes. An event of default occurs when a borrower or loan party defaults on an obligation and is defined in the relevant agreement. A cross-default clause is a provision in the events of default section of a credit agreement that triggers an event of default under the credit agreement if the borrower or any other specified party (such as subsidiary guarantors, restricted subsidiaries, or parent guarantors) defaults under another debt agreement under which it is obligated, regardless of whether or not the lenders under that other debt agreement have accelerated the debt or exercised any other remedies available to them. For more information on cross -default and cross-acceleration clauses, see the ...