Definitions for "Event of default"
An event described in a promissory note, security agreement, or loan agreement that triggers rights of the lender to take remedies set forth in the documents. The most common event of default is the debtor's failure to make required interest and/or principal payments to the bank when they are due. Often, the remedy permitted to the bank when an event of default occurs is the right to declare the debt to be due and payable in its entirety. Formal loan agreements frequently include numerous events of default.
The occurrence of any one of the following: (a) the death or judicial declaration of incompetence of Customer, if Customer is a natural person; (b) the filing of a petition in bankruptcy, or a petition for the appointment of a receiver, or the institution of any bankruptcy, insolvency or similar proceeding by or against Customer; (c) the filing of an attachment against any of Customer's Accounts carried by; (d) failure to pay when due any amount due under this Agreement or any Contract or other transaction hereunder or to deliver to when due any Margin or Collateral required or requested by in connection with this Agreement or any Contract or other transaction hereunder; (e) Customer's failure to promptly provide any information requested pursuant to this Agreement; (f) any representation made by Customer in this Agreement (including the Annexes) is or at any time becomes, untrue or incorrect; and (g) any breach by Customer of any other provision of this Agreement, including the Annexes.
The failure of a company to satisfy its contractual agreements and covenants in loan agreements or mezzanine securities documents. Common events of default include failure to pay principal, interest, or dividends when due; violation of the company's representations, warranties, or covenants; or becoming insolvent.
Certain specified events specified in loan and other documentation which might jeopordise a lender's or investor's position. If they occur the lender or investor is allowed to withdraw and claim earlier repayment of indebtedness.