Interest Rates upon Default Clause Samples
The 'Interest Rates upon Default' clause establishes the increased interest rate that applies if a party fails to meet its payment obligations under an agreement. Typically, this clause specifies that, upon default, the interest rate on overdue amounts will rise above the standard rate, often by a fixed percentage or margin. This mechanism serves to compensate the non-defaulting party for the additional risk and administrative burden caused by late payments, and acts as a deterrent against default by making it more costly for the defaulting party.
Interest Rates upon Default. Notwithstanding Sections 4.1.1 and 4.1.2, (i) automatically if an Event of Default under Section 12.1.3 arising from any case or proceeding under any bankruptcy law (or similar insolvency law), or any dissolution or liquidation proceedings exists with respect to Parent or any Borrower and (ii) upon the written request of the Required Lenders at any time (and for so long as) any other Event of Default exists, the interest rate applicable to each Loan shall be increased by 2% per annum; provided that such increased interest rate shall not apply to obligations owed to a Defaulting Lender for so long as such Lender is a Defaulting Lender.
Interest Rates upon Default. Notwithstanding Sections 4.1.1 and 4.1.2, upon the written request of the Required Lenders at any time (and for so long as) an Event of Default exists, the interest rate applicable to each Loan shall be increased by 2% per annum; provided that such increased interest rate shall not apply to obligations owed to a Defaulting Lender for so long as such Lender is a Defaulting Lender.