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.
In contrast to a cross-acceleration, a cross-default ( www.practicallaw.com/1-382-3377) 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.
Cross-acceleration clauses are common in indentures ( www.practicallaw.com/0-382-3537) and investment-grade credit agreements.
For more information, see Standard Clause, Loan Agreement: Cross-acceleration Event of Default ( www.practicallaw.com/7-500-3392) .