Principal Component Clause Samples
The Principal Component clause defines the main financial amount or asset that serves as the basis for calculating interest, repayments, or other financial obligations in a contract. In practice, this clause specifies the original sum of money lent, invested, or otherwise involved in the agreement, and it may outline how this amount is adjusted or referenced throughout the contract's term. Its core function is to ensure clarity and precision regarding the key monetary figure upon which other contractual calculations and obligations depend, thereby reducing the risk of disputes over financial terms.
Principal Component. With respect to reinstatement of a reduction in the Principal Component resulting from any Tender Drawing, IF:
(i) such reduction has not been reinstated pursuant to Paragraph 5(ii)(A) of the Letter of Credit;
(ii) the Issuing Bank and/or the Participating Banks shall have been reimbursed by the Account Party for such Tender Drawing;
(iii) any demand loan(s) and Advance(s) made in respect of such Tender Drawing shall have been repaid by the Account Party, together with any interest thereon and any other amounts payable hereunder in connection therewith; AND
(iv) no Event of Default shall have occurred and then be continuing; THEN, the Issuing Bank shall deliver to the Paying Agent, by hand delivery or facsimile transmission, a Notice of Reinstatement in the form of Exhibit 5 to the Letter of Credit reinstating the Principal Component to the extent of such Tender Drawing.
Principal Component. The principal amount of the Series 2022 Installment Payments to be made by the City to the Authority hereunder is $[principal amount].