KB Version 2

Average score: 0 (total votes: 0)

1. A covenant pursuant to which a person agrees to take a certain action.
2. Examples of affirmative covenants include agreements to deliver periodic financial statements, to comply with laws, to pay taxes and to maintain corporate existence.
3. The breach of most affirmative covenants results in a default. The default typically does not turn into an event of default (i.e. the lender can not accelerate the maturity of the debt immediately) until the giving of notice or the passage of time (or both). This gives the borrower/issuer an opportunity to cure the breach before the obligation is accelerated.

Printed from http://uccstuff.com?function=display&id=ID010300.