- What is cross collateralization in music?
- How do you get around cross collateralization?
- Is default the same as breach?
- What is a potential event of default?
- What is a cross guarantee?
- What is a cross default threshold?
- What is the difference between cross default and cross acceleration?
- How does cross collateralization work?
- Can banks cross collateralize?
- Is protection for the lender in the event of default by the borrower?
- What is cross acceleration?
- What is a default clause?
- What is a cross collateral cross default agreement?
- What happens when you default on a contract?
- Why is cross collateralization bad?
What is cross collateralization in music?
A clause in recording and publishing agreements allowing the recording or publishing company to recoup outstanding advance balances from one album release with revenues and the next forthcoming release(s)..
How do you get around cross collateralization?
Typically, a re-affirmation agreement may be a good deal if it lowers an interest rate, lowers a monthly payment or eliminates a cross-collateralization clause. Another option for dealing with a cross-collateralization clause is to file a Chapter 13 Bankruptcy.
Is default the same as breach?
Default vs. breach is a confusing term related to contract execution. … In contract law, a breach means the failure of a contracting party to perform their obligations according to the terms of the agreement. Default, according to the law of obligations and banking law, means to refuse to pay a debt when due.
What is a potential event of default?
A Potential Event of Default is a Failure to Pay or Deliver, Breach of Agreement (or other Event of Default) with an unexpired grace period, or where the grace period has expired but the Non-defaulting Party hasn’t (yet) given a notice of default actually accelerating the default into an actual Event of Default.
What is a cross guarantee?
Also known as a cross-group guarantee. A guarantee from each member in a group of companies of the obligation(s) of each other member of the group. … If the lender has a cross guarantee, it will be able to recover the money from whichever company in the group has the most assets (and the least debt).
What is a cross default threshold?
Specified Indebtedness default is the focus of the Cross Default clause. A Threshold Amount is a money figure or its equivalent above which a Non-defaulting Party may exercise its rights following its counterparty’s debt default to terminate all Transactions under the Master Agreement.
What is the difference between cross default and cross acceleration?
In contrast to a cross-acceleration, a cross-default clause in Agreement A causes an automatic event of default under that agreement when the borrower defaults under Agreement B, even if the lender under Agreement B does not accelerate repayment.
How does cross collateralization work?
Cross collateralization is a method used by lenders to use the collateral of one loan, such as a car, to secure another loan you have with the lender. … Worse, if you fall behind on another unsecured loan, such as a credit card, the lender can repossess your car.
Can banks cross collateralize?
Cross collateralization clauses can easily be overlooked, leaving people unaware of the multiple ways they might lose their property. Financial institutions often cross collateralize property if a customer takes out one of its loans and then follows up with other financing from that same bank.
Is protection for the lender in the event of default by the borrower?
In many agreements, the lender will include a contract provision covering events of default to protect itself in case it appears that the borrower will not be able to or does not intend to continue repaying the loan in the future. … This often is employed if the default risk is beyond a certain point.
What is cross acceleration?
A clause which operates by defaulting a borrower under Agreement A when it defaulted under Agreement B and the lender under Agreement B accelerates repayment. A cross-acceleration provision effectively gives the lender under Agreement A the benefit of the default provisions in Agreement B.
What is a default clause?
A default clause is a provision in a legal contract that states what will happen if either party in a contract defaults or fails to hold up their end of the agreement. These clauses can be found in any type of contract including loan agreements, lease agreements, and property agreements.
What is a cross collateral cross default agreement?
Both cross-collateralization (aka “dragnet”) and cross-default clauses are common provisions in commercial loan documents. A cross-collateralization clause generally provides that the same collateral, often real property, secures multiple loans from the same lender. … In most cases, both clauses will appear together.
What happens when you default on a contract?
When one party violates the contract, this is called default and might — depending upon the contract’s terms and how long the default lasts — void the contract or give the other party the right to terminate.
Why is cross collateralization bad?
Another major downfall of cross collateralisation occurs if you want to sell one, or more, of your properties. This is because you are essentially changing the terms of your contract with your lender. By selling one property you are taking it away from your lender as security and changing your loan-to-value ratio.