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Acceleration Clause


A provision/ clause, normally added to an a credit agreement like an indenture agreement, bond, note, mortgage, deed of trust, or other similar contract, whereby a lender can require immediate payment of all unpaid balance if specified conditions of default should occur before the time that payment would otherwise fall due.

Such events include insolvency, failure to pay interest and principal amounts, nonpayment of real estate taxes, nonpayment of insurance premiums, etc. The agreement may provide that payment gets accelerated whenever a default event of any significant obligation takes place.



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