Adjustments in Targeted Principal Balances Clause Samples
The "Adjustments in Targeted Principal Balances" clause defines how and when the principal amounts owed or targeted under an agreement may be modified. Typically, this clause outlines the circumstances—such as prepayments, defaults, or recalculations due to changes in underlying assets—that trigger a change in the targeted principal balance. For example, if a borrower makes an early payment or if certain performance metrics are not met, the targeted principal balance may be increased or decreased accordingly. The core function of this clause is to ensure that the principal amounts reflect the current realities of the agreement, thereby maintaining fairness and accuracy in financial obligations.
Adjustments in Targeted Principal Balances. (a) Railcar Dispositions. If Net Disposition Proceeds have been transferred to the Collections Account, then (i) on the next following Payment Date, such Net Disposition Proceeds shall be applied in accordance with Section 3.11(c), unless an Event of Default has occurred and is continuing, in which case, such Net Disposition Proceeds shall be applied in accordance with Section 3.11(b), and (ii) on such Payment Date, the Scheduled Targeted Principal Balance of the Equipment Notes being partially redeemed on such Payment Date will be reduced to, for all subsequent Payment Dates, an amount equal to the result of (x) the Scheduled Targeted Principal Balances of such Notes for each such Payment Date, minus (y) the product of (A) the Redemption Fraction for such Equipment Notes as of each such Payment Date and (B) the Scheduled Targeted Principal Balance of such Equipment Notes for each such Payment Date. If Net Disposition Proceeds are applied to early repayment of Equipment Notes pursuant to this paragraph, then the Issuer shall also be required to pay, in connection with and on the date of the resulting prepayment, Redemption Premium on such prepaid principal amount if at such time an Optional Redemption of the applicable Equipment Notes would also require the payment of a Redemption Premium (with such Redemption Premium, if owing, to be determined in the same manner); provided, however, that notwithstanding anything herein to the contrary, no Redemption Premium will be due (i) as a result of any Permitted Discretionary Sales which in the aggregate are less than 25% of the sum of (x) the Adjusted Value of the Portfolio Railcars owned by the Issuer on the Initial Closing Date calculated as of the Initial Closing Date and (y) the Adjusted Value of the Portfolio Railcars acquired by the Issuer after the Initial Closing Date (if any) calculated as of the relevant Delivery Date or (ii) as a result of any Involuntary Railcar Dispositions, Scrap Value Dispositions or Purchase Option Dispositions, to the extent provided for in the related Series Supplement.
Adjustments in Targeted Principal Balances. (a) Railcar Dispositions. If Net Disposition Proceeds have been included in the Available Collections Amount on any Payment Date, then the Scheduled Targeted Principal Balance of the Equipment Notes for such Payment Date and for all subsequent Payment Dates will be equal to the product of (a) the Scheduled Adjustment Fraction for the Equipment Notes as of each such Payment Date and (b) the Scheduled Targeted Principal Balance of the Equipment Notes for each such Payment Date, as adjusted for Optional Redemptions as provided in Section 3.14(b) below but without giving effect to any previous adjustments made to such Scheduled Targeted Principal Balance pursuant to this Section 3.14(a).
Adjustments in Targeted Principal Balances