in analogy to EoD, this is adverse situation when the Borrower is breaching more than one finance contract, as X-D was applied regardless which contract among them triggered EoD situation. This clause represents standard for more structured financing or “big tickets” deals and even including ISDA related contracts, whereas such event of Cross-default requires coordinating activities of all Creditors to solve the situation. For Borrower this represents major threat as bigger part of his Debts may become immediately due and this may lead to a Bankruptcy in case of his cash shortage. On the other hand, the Borrower may agree with his Creditors certain levels (Thresholds), e.g. USD 10 Mio, which then represents minimum amount of defaulted obligations that is required to trigger an Cross-default on other (credit) agreements. This represents certain protection for Borrower, that in case of minor past due payments or breaches, it will not cause discontinuation of his major financing relationships that may be essential for its daily business.

Further, as mentioned above, this protection is very often used also in FX business area for other Counterpartys protection. The principle is the same as in lending business relations, which means that triggering an X-D, all other payments resp. deliveries related to concluded FX deals may become immediatelly due (within certain time-frame, but certainly prior to their initial maturity). Below attached is an Example of Cross-Default, as applied in accordance with ISDA Master Agreement.