Common use of Delayed Payment Rate Clause in Contracts

Delayed Payment Rate. For purposes of Paragraph 3 above, if there is a delayed settlement of a payment due, from either party hereunder, there will be a “Delayed Payment Interest Penalty” added to the amount that is overdue. The Delayed Payment Interest Penalty is equal to the amount due, times the specified interest rate, prorated for the period that the amount is overdue. The interest rate used is equal to XX basis points plus the average of the one month London Interbank Offered Rates (LIBOR) as published by The Wall Street Journal at the end of each calendar month ending during the current Accounting Period. In the event a payment is delayed for multiple Accounting Periods, the Delayed Payment Interest Penalty shall be calculated for each Accounting Period. For purposes of this Paragraph, a payment will be considered overdue forty-five days (45) days after the end of the Accounting Period.