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Changing The Terms Consent Solicitation Outline

LLM Law Outlines > Corporate Bonds and Credit Agreement Outlines

This is an extract of our Changing The Terms Consent Solicitation document, which we sell as part of our Corporate Bonds and Credit Agreement Outlines collection written by the top tier of NYU School Of Law students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Corporate Bonds and Credit Agreement Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:

VII. Changing the Terms
A. General
Freeport-McMoran Indenture, Section 9.01-9.02
Petrohawk Indenture, Section 9.1-9.2
Northwest Note Agreement, Section 17.01
[29/04 - 1:20:00]

• 3 Approval Requirement

1. No holder approval: to cure any ambiguity or defect???

2. Approval by each affected holder: compare with 6.07, sometimes beyond

3. Approval by requisite majority

• Approval Requirements, Waiver Requirements, and No Action Clause
Art 9 Freeport
- 9.01 Without Consent of Holder

(a) The Company and the Trustee may amend this Indenture or the
Securities without notice to or consent of any Holder to:
(i) (ii) Comply with Art 5 (mergers)
(ii) (iii) Provide for uncertificated Securities
(iii)(iv) Add Guarantees
(v) Add to the covenants
(v) (vi) Comply with SEC requirements
(vii) Make any change that does not adversely affect the rights of any Holder

[But harmful]: (i) Cure ambiguity, omission, defect or inconsistency
(i) Drafting error "ambiguity"  company may abuse this clause, too broad
(ii) But still, trustee's consent required for amendments 
trustee may be reluctant to do that (bondholder may sue vs.
company may not hire him)  trustee may ask outside counsel9.02 With Consent of Holders

The company and trustee may amend without notice to holder but with written consent of the Holders of at least a majority in principal amount of the Securities then outstanding.
o However, without consent of each Holder, an amendment may not:
 (i) Reduce amount of securities
 (ii)Reduce interest rate or extend time for repayment of interest
 (iii)Reduce principal of or extend stated maturity
 (iv) Reduce premium payable upon redemption or change the time of redemption 1

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