During the PIK Interest Accrual Period, interest shall accrue at the rates set forth in Section 2 but no payments of principal or accrued interest shall be due (other than by an acceleration after an Event of Default); provided that upon any prepayment of principal during the PIK Interest Accrual Period, all accrued interest on such principal shall be due on the date of such prepayment and must be paid together with such principal. On the PIK Interest Payment Date, the PIK Interest Accrual Amount shall be paid in kind such that effective as of the PIK Interest Payment Date the PIK Interest Accrual Amount shall be deemed to constitute, and shall be capitalized into, outstanding principal.