Payment Default or Acceleration Clause Samples

Payment Default or Acceleration. Except under circumstances when the terms of Section 2.05 of this Agreement are applicable, if (a) a Payment Default or Senior Indebtedness Acceleration shall have occurred and be continuing and (b) the Subordinated Lenders or the Subordinated Indebtedness Representative shall have received a Payment Default Notice, then neither the Borrower nor any Subsidiary may make, and no Subordinated Lender shall accept, receive or collect, any direct or indirect payment or distribution of any kind or character (in cash, securities, other Property, by setoff, or otherwise other than Reorganization Securities) of any properties or assets of the Borrower or any Subsidiary on account of the Subordinated Obligations during the Payment Blockage Period; provided, however, that in the case of any payment on or in respect of any Subordinated Obligation that would (in the absence of any such Payment Default Notice) have been due and payable on any date (a "Scheduled Payment Date") during such Payment Blockage Period pursuant to the terms of the Subordinated Notes as in effect on the date hereof or as amended consistent with the provisions of Section 2.12 of this Agreement, the provisions of this Section 2.02 shall not prevent the making and acceptance of such payment (a "Scheduled Payment"), together with any additional default interest as is due on the Subordinated Notes, on or after the date immediately following the termination of such Payment Blockage Period. In the event that, notwithstanding the foregoing, either the Borrower or any Subsidiary shall make any payment or distribution to any Subordinated Lender prohibited by the foregoing provisions of this Section 2.02, then and in such event such payment or distribution shall be held in trust for the benefit of and immediately shall be paid over to the holders of the Senior Indebtedness or the Senior Indebtedness Representative for application against the Senior Indebtedness remaining unpaid until such Senior Indebtedness is paid in full in cash. Any Payment Default Notice shall be deemed received by the Subordinated Lenders upon the date of actual receipt by the Subordinated Lenders or the Subordinated Indebtedness Representative of such Payment Default Notice in writing.