Obligees' Right to Direct Indenture Trustee After Indenture Default Sample Clauses
This clause grants the obligees—the parties to whom obligations are owed—the authority to instruct the indenture trustee on actions to take following an event of default under the indenture agreement. In practice, this means that if the issuer fails to meet its obligations, such as missing payments or breaching covenants, the obligees can collectively direct the trustee to pursue remedies like enforcing security interests or initiating legal proceedings. The core function of this clause is to empower the obligees to protect their interests and ensure that the trustee acts in accordance with their wishes during a default, thereby providing a mechanism for coordinated action and reducing the risk of inaction or misalignment between the trustee and the obligees.
Obligees' Right to Direct Indenture Trustee After Indenture Default. During the continuance of any Indenture Default, the Holders of a majority in principal amount of the Outstanding Obligations shall have the right, by an Act of Obligees, to direct the Indenture Trustee:
(1) to exercise or to refrain from exercising any right or to enforce any remedy granted to it by this Indenture; and
(2) to direct the time, method and place of the exercise of any such right or the enforcement of any such remedy; PROVIDED THAT, subject to Section 7.03, the Indenture Trustee shall have the right not to take any such action if it shall determine in good faith that the action would involve it in personal liability, would subject it to expenses and liability against which it had not been offered adequate security, or would be unjustly prejudicial to the Obligees not parties to such direction. Anything in this Section 6.06(a) to the contrary notwithstanding, the Indenture Trustee shall be obligated to demand payment of the Guarantees as provided in Section 6.02(a) unless the Holders of all Outstanding Obligations shall have elected to terminate the Guarantees as provided in Section 6.04(a)(2), in which case the Indenture Trustee shall be obligated to refrain from making such demand.
Obligees' Right to Direct Indenture Trustee After Indenture Default. (a) During the continuance of any Indenture Default, the Holders of a majority in principal amount of the Outstanding Obligations shall have the right, by an Act of Obligees, to direct the Indenture Trustee: (1) to exercise or to refrain from exercising any right or to enforce any remedy granted to it by this Indenture; and (2) to direct the time, method and place of the exercise of any such right or the enforcement of any such remedy; provided that, subject to Section 7.03, the Indenture Trustee shall have the right not to take any such action if it shall determine in good faith that the action would involve it in personal liability, would subject it to expenses against which it has not been offered adequate security and indemnity, or would be unjustly prejudicial to the Obligees not parties to such direction; and provided further that, notwithstanding any other provision of this Indenture to the contrary, the Indenture Trustee shall be obligated to demand payment of the Guarantees as provided in Section 6.02(a) unless the Holders of all the Outstanding Obligations shall have directed him not to make demand.
(b) Nothing in paragraph (a) shall affect the right of any Obligee to institute any judicial or other proceeding, if the Indenture Trustee declines to do so, against the Secretary while the Guarantees are in effect or against the Shipowner or the Indenture Trustee if the guarantees have terminated under Section 6.04(a)(4); provided, however, that such action does not seek to obtain priority or preference over any other Obligees or to enforce any right under this Indenture, except for the equal and ratable benefit of all the Obligees.