Step-In Payment Rights Clause Samples
The Step-In Payment Rights clause grants a third party, often a lender or guarantor, the ability to make payments on behalf of a party that has defaulted or failed to meet its payment obligations under a contract. In practice, this means that if the primary obligor misses a payment, the third party can step in to fulfill the payment, thereby preventing a default event from triggering further consequences such as termination or enforcement actions. This clause is essential for protecting the interests of third parties with a financial stake in the contract, ensuring continuity of the agreement, and minimizing disruptions caused by payment failures.
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Step-In Payment Rights. Contractor shall notify Purchaser within five (5) business days of it becoming aware of the occurrence of an event that with or without the passage of time or the giving of notice, or both, would give rise to a right of termination or a right to receive damages or a payment of penalties under any of the Contractor’s Major Subcontracts that Contractor is not then disputing, in good faith, with such subcontractor (a “Default”). Purchaser shall have the right (but not the obligation) to cure any such Default, including by making any payment due thereunder. The Firm Fixed Price shall be reduced by the amount of the cost to cure such Default paid by Purchaser pursuant to the preceding sentence. Such reduction in the Firm Fixed Price shall be applied against and used to reduce the next payment due to Contractor under the Payment Plan (which shall be adjusted accordingly). No action on the part of Purchaser under this Section shall relieve Contractor from any obligations or responsibilities under this Contract or the Major Subcontract.
Step-In Payment Rights. Contractor shall notify MSV within five (5) business days of it becoming aware of the occurrence of an event that with or without the passage of time or the giving of notice, or both, would give rise to a right of termination or a right to receive damages or a payment of penalties under any of the Contractor’s Major Subcontracts that Contractor is not then disputing, in good faith, with such subcontractor (a “Default”). MSV shall have the right (but not the obligation) to cure any such Default, including by making any payment due thereunder. The Firm Fixed Price shall be reduced by the amount of the cost to cure such Default paid by MSV pursuant to the preceding sentence. Such reduction in the Firm Fixed Price shall be applied against and used to reduce the next payment due to Contractor under the Payment Plan (which shall be adjusted accordingly). No action on the part of MSV under this Article shall relieve Contractor from any obligations or responsibilities under this Contract or the Major Subcontract.
Step-In Payment Rights. Contractor shall notify Customers within five (5) Business Days of it becoming aware of the occurrence of an event that with or without the passage of time or the giving of notice, or both, would give rise to a right of termination or a right to receive damages or a payment of penalties under any of Contractor’s Major Subcontracts (a “Subcontract Default”). Customers shall have the right (but not the obligation) to cure any such Subcontract Default, including by making any payment due there under. The price shall be reduced by the amount of the cost to cure such Subcontract Default paid by Customers pursuant to the preceding sentence. Such reduction in the price shall be applied against and used to reduce the next payment due to Contractor under the Milestone Schedule (which shall be adjusted accordingly). No action on the part of Customers under this Section shall relieve Contractor from any obligations or responsibilities under this Contract or the Major Subcontract.
Step-In Payment Rights. Contractor shall notify TerreStar within five (5) Business Days of it becoming aware of the occurrence of an event that with or without the passage of time or the giving of notice, or both, would give rise to a right of termination or a right to receive damages or a payment of penalties under any of Contractor’s Major Subcontracts that Contractor is not then disputing, in good faith, with such Major Subcontractor (a “Subcontractor Default”). TerreStar shall have the right (but not the obligation) to cure any such Subcontractor Default, including by making any payment due thereunder. The Purchase Price shall be reduced by the amount of the cost to cure such Subcontractor Default paid by TerreStar pursuant to the preceding sentence. Such reduction in the Purchase Price shall be applied against and used to reduce the next payment due to Contractor under the Milestone Schedule (which shall be adjusted accordingly). No action on the part of TerreStar under this Article shall relieve Contractor from any obligations or responsibilities under this Contract or the Major Subcontract.