EXHIBIT D.3
SUPPLEMENTAL INDENTURE OF TRUST
by and between
TORTOISE ENERGY INFRASTRUCTURE CORPORATION,
as Issuer
and
BNY MIDWEST TRUST COMPANY,
as Trustee
Authorizing the Issuance of
$__________ aggregate principal amount Series C
Auction Rate Senior Notes
Dated as of _____, 2005
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND USE OF PHRASES.................................1
Section 1.01 Definitions............................................1
Section 1.02 Interpretation.........................................8
ARTICLE II NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE
OF PROCEEDS OF NOTES...........................................8
Section 2.01 General Terms..........................................8
Section 2.02 Interest...............................................9
Section 2.03 Redemption............................................11
Section 2.04 Designation of Rate Period............................15
Section 2.05 Restrictions on Transfer..............................16
Section 2.06 1940 Act Tortoise Notes Asset Coverage................16
Section 2.07 Tortoise Notes Basic Maintenance Amount...............16
Section 2.08 Certain Other Restrictions............................16
Section 2.09 Compliance Procedures for Asset Maintenance Tests.....16
Section 2.10 Delivery of Notes.....................................17
Section 2.11 Trustee's Authentication Certificate..................18
ARTICLE III GENERAL PROVISIONS............................................18
Section 3.01 Trustee as Paying Agent...............................18
Section 3.02 The Issuer to Provide Funds for Interest and
Redemptions...........................................18
Section 3.03 Disbursing Interest and Redemption Price..............18
Section 3.04 Original Issue of Tortoise Note Authentication
Certificates..........................................18
Section 3.05 Registration of Transfer or Exchange of Tortoise
Notes.................................................18
Section 3.06 Removal of Legend.....................................19
Section 3.07 Lost, Stolen or Destroyed Tortoise Note
Authentication Certificates...........................19
Section 3.08 Disposition of Canceled Certificates; Record
Retention.............................................19
Section 3.09 Register..............................................20
Section 3.10 Return of Funds.......................................20
Section 3.11 Date of Execution.....................................20
Section 3.12 Laws Governing........................................20
Section 3.13 Severability..........................................20
Section 3.14 Exhibits..............................................20
ARTICLE IV APPLICABILITY OF INDENTURE....................................20
APPENDIX A AUCTION PROCEDURES...........................................A-1
APPENDIX B FORM OF NOTES................................................B-1
APPENDIX C FORM OF TRUSTEE AUTHENTICATION CERTIFICATE...................C-1
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SUPPLEMENTAL INDENTURE OF TRUST
THIS SUPPLEMENTAL INDENTURE OF TRUST (this "Supplemental Indenture")
dated as of _____, 2005, is by and between TORTOISE ENERGY INFRASTRUCTURE
CORPORATION, a Maryland corporation (the "Issuer") and BNY MIDWEST TRUST
COMPANY, an Illinois trust company (together with its successors, the
"Trustee"), as successor trustee hereunder (all capitalized terms used in these
preambles, recitals and granting clauses shall have the same meanings assigned
thereto in Article I hereof);
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Issuer has previously entered into an Indenture dated as
of July 13, 2004 (the "Original Indenture," and together with this Supplemental
Indenture, the "Indenture"), between the Issuer and the Trustee;
WHEREAS, the Issuer desires to enter into this Supplemental Indenture
in order to issue Tortoise Notes pursuant to the terms of the Original
Indenture, including Section 3.1 thereof;
WHEREAS, the Issuer represents that it has been formed and is validly
existing as a Maryland corporation and that by proper action it has duly
authorized the issuance of $__________ of its auction rate senior notes, Series
C (the "Series C Tortoise Notes" or the "Tortoise Notes"), and it has by proper
action authorized the execution and delivery of this Supplemental Indenture;
WHEREAS, the Tortoise Notes constitute Securities as defined in the
Indenture; and
WHEREAS, the Trustee has agreed to accept the trusts herein contained
upon the terms herein set forth;
NOW, THEREFORE, it is mutually covenanted and agreed as follows:
ARTICLE I
DEFINITIONS AND USE OF PHRASES
SECTION 1.01 DEFINITIONS. All words and phrases defined in Article I
of the Indenture shall have the same meaning in this Supplemental Indenture,
except as otherwise appears in this Article. In addition, the following terms
have the following meanings in this Supplemental Indenture unless the context
clearly requires otherwise:
"'AA' COMPOSITE COMMERCIAL PAPER RATE" on any date means (i)
the interest equivalent of the 30-day rate, in the case of a Rate Period which
is a Standard Rate Period or shorter, or the 180-day rate, in the case of all
other Rate Periods on financial commercial paper on behalf of issuers whose
corporate bonds are rated "AA" by S&P, or the equivalent of such rating by
another nationally recognized rating agency, as announced by the Federal Reserve
Bank of New York for the close of business on the Business Day immediately
preceding such date; or (ii) if the Federal Reserve Bank of New York does not
make available such a rate, then the arithmetic average of the interest
equivalent of such rates on financial commercial paper placed on behalf of such
issuers, as quoted on a discount basis or otherwise by the Commercial Paper
Dealers to the Auction Agent for the close of business on the Business Day
immediately preceding such date (rounded to the next highest .001 of 1%). If any
Commercial Paper Dealer does not quote a rate required to determine the "AA"
Composite Commercial Paper Rate, such rate shall be determined on the basis of
the quotations (or quotation) furnished by the remaining Commercial Paper
Dealers (or Dealer), if any, or, if there are no such Commercial Paper
Dealers, by the Auction Agent. For purposes of this definition, (A) "Commercial
Paper Dealers" shall mean (1) Citigroup Global Markets Inc., Xxxxxx Brothers
Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxx Sachs &
Co.; (2) in lieu of any thereof, its respective Affiliate or successor; and (3)
in the event that any of the foregoing shall cease to quote rates for financial
commercial paper of issuers of the sort described above, in substitution
therefor, a nationally recognized dealer in financial commercial paper of such
issuers then making such quotations selected by the Corporation, and (B)
"interest equivalent" of a rate stated on a discount basis for financial
commercial paper of a given number of days' maturity shall mean a number equal
to the quotient (rounded upward to the next higher one-thousandth of 1%) of (1)
such rate expressed as a decimal, divided by (2) the difference between (x) 1.00
and (y) a fraction, the numerator of which shall be the product of such rate
expressed as a decimal, multiplied by the number of days in which such financial
commercial paper shall mature and the denominator of which shall be 360.
"AFFILIATE" means any person controlled by, in control of or
under common control with the Issuer; provided that no Broker-Dealer controlled
by, in control of or under common control with the Issuer shall be deemed to be
an Affiliate nor shall any corporation or any person controlled by, in control
of or under common control with such corporation one of the directors or
executive officers of which is also a Director of the Issuer be deemed to be an
Affiliate solely because such director or executive officer is also a Director
of the Issuer.
"AGENT MEMBER" means a member of or participant in the
Securities Depository that will act on behalf of a Bidder.
"ALL HOLD RATE" means 80% of the "AA" Composite Commercial
Paper Rate.
"APPLICABLE RATE" means, with respect to each Series of
Tortoise Notes for each Rate Period (i) if Sufficient Clearing Orders exist for
the Auction in respect thereof, the Winning Bid Rate, (ii) if Sufficient
Clearing Orders do not exist for the Auction in respect thereof, the Maximum
Rate and (iii) in the case where all the Tortoise Notes of a series are the
subject of Hold Orders for the Auction in respect thereof, the All Hold Rate,
and (iv) if an Auction is not held for any reason (including the circumstance
where there is no Auction Agent or Broker-Dealer), the Maximum Rate.
"AUCTION" means each periodic operation of the procedures set
forth in Appendix A.
"AUCTION AGENT" means The Bank of New York unless and until
another commercial bank, trust company, or other financial institution appointed
by a resolution of the Board of Directors enters into an agreement with the
Issuer to follow the Auction Procedures for the purpose of determining the
Applicable Rate.
"AUCTION DATE" means the first Business Day next preceding the
first day of a Rate Period for each Series of Tortoise Notes.
"AUCTION PROCEDURES" means the procedures for conducting
Auctions set forth in Appendix A hereto.
"AUTHORIZED DENOMINATIONS" means $25,000 and any integral
multiple thereof.
"BENEFICIAL OWNER," with respect to each Series of Tortoise
Notes, means a customer of a Broker-Dealer who is listed on the records of that
Broker-Dealer (or, if applicable, the Auction Agent) as a holder of such Series
of Tortoise Notes.
"BID" shall have the meaning specified in Appendix A hereto.
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"BIDDER" shall have the meaning in Appendix A hereto;
provided, however, that neither the Issuer nor any affiliate thereof shall be
permitted to be a Bidder in an Auction, except that any Broker-Dealer that is an
affiliate of the Issuer may be a Bidder in an Auction, but only if the Orders
placed by such Broker-Dealer are not for its own account.
"BOARD OF DIRECTORS" or "BOARD" means the Board of Directors
of the Issuer or any duly authorized committee thereof as permitted by
applicable law.
"BROKER-DEALER" means any broker-dealer or broker-dealers, or
other entity permitted by law to perform the functions required of a
Broker-Dealer by the Auction Procedures, that has been selected by the Issuer
and has entered into a Broker-Dealer Agreement that remains effective.
"BROKER-DEALER AGREEMENT" means an agreement among the Auction
Agent and a Broker-Dealer, pursuant to which such Broker-Dealer agrees to follow
the Auction Procedures.
"BUSINESS DAY" means a day on which the New York Stock
Exchange is open for trading and which is not a Saturday, Sunday or other day on
which banks in the City of New York, New York are authorized or obligated by law
to close.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMERCIAL PAPER DEALERS" has the meaning set forth in the
definition of AA Composite Commercial Paper Rate.
"COMMISSION" means the Securities and Exchange Commission.
"DEFAULT RATE" means the Reference Rate multiplied by three
(3).
"DEPOSIT SECURITIES" means cash and any obligations or
securities, including short term money market instruments that are Eligible
Assets, rated at least AAA, A-2 or SP-2 by Fitch, except that, such obligations
or securities shall be considered "Deposit Securities" only if they are also
rated at least P-2 by Moody's.
"DISCOUNT FACTOR" means the Moody's Discount Factor (if
Xxxxx'x is then rating the Tortoise Notes), Fitch Discount Factor (if Fitch is
then rating the Tortoise Notes) or an Other Rating Agency Discount Factor,
whichever is applicable.
"DISCOUNTED VALUE" means the quotient of the Market Value of
an Eligible Asset divided by the applicable Discount Factor, provided that with
respect to an Eligible Asset that is currently callable, Discounted Value will
be equal to the quotient as calculated above or the call price, whichever is
lower, and that with respect to an Eligible Asset that is prepayable, Discounted
Value will be equal to the quotient as calculated above or the par value,
whichever is lower.
"ELIGIBLE ASSETS" means Moody's Eligible Assets or Fitch's
Eligible Assets (if Moody's or Fitch are then rating the Tortoise Notes) and/or
Other Rating Agency Eligible Assets, whichever is applicable.
"EXISTING HOLDER," with respect to Tortoise Notes of a series,
shall mean a Broker-Dealer (or any such other Person as may be permitted by the
Issuer) that is listed on the records of the Auction Agent as a holder of
Tortoise Notes of such series.
"FITCH" means Fitch Ratings and its successors at law.
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"FITCH DISCOUNT FACTOR" means the discount factors set forth
in the Fitch Guidelines for use in calculating the Discounted Value of the
Issuer's assets in connection with Fitch's ratings of Tortoise Notes.
"FITCH ELIGIBLE ASSET" means assets of the Issuer set forth in
the Fitch Guidelines as eligible for inclusion in calculating the Discounted
Value of the Issuer's assets in connection with Fitch's ratings of Tortoise
Notes.
"FITCH GUIDELINES" mean the guidelines provided by Fitch, as
may be amended from time to time, in connection with Fitch's ratings of Tortoise
Notes.
"HOLD ORDER" shall have the meaning specified in Appendix A
hereto.
"HOLDER" means, with respect to Tortoise Notes, the registered
holder of notes of each series of Tortoise Notes as the same appears on the
books or records of the Issuer.
"LIBOR" means, for purposes of determining the Reference Rate,
(i) the rate for deposits in U.S. dollars for the designated Rate Period, which
appears on display page 3750 of Moneyline's Telerate Service ("Telerate Page
3750") (or such other page as may replace that page on that service, or such
other service as may be selected by Xxxxxx Brothers Inc. or its successors) as
of 11:00 a.m., London time, on the day that is the Business Day on the Auction
Date or, if the Auction Date is not a Business Day, the Business Day preceding
the Auction Date (the "LIBOR Determination Date"), or (ii) if such rate does not
appear on Telerate Page 3750 or such other page as may replace such Telerate
Page 3750, (A) Xxxxxx Brothers Inc. shall determine the arithmetic mean of the
offered quotations of the reference banks to leading banks in the London
interbank market for deposits in U.S. dollars for the designated Rate Period in
an amount determined by Xxxxxx Brothers Inc. by reference to requests for
quotations as of approximately 11:00 a.m. (London time) on such date made by
Xxxxxx Brothers Inc. to the reference banks, (B) if at least two of the
reference banks provide such quotations, LIBOR shall equal such arithmetic mean
of such quotations, (C) if only one or none of the reference banks provide such
quotations, LIBOR shall be deemed to be the arithmetic mean of the offered
quotations that leading banks in The City of New York, New York selected by
Xxxxxx Brothers Inc. (after obtaining the Issuer's approval) are quoting on the
relevant LIBOR Determination Date for deposits in U.S. dollars for the
designated Rate Period in an amount determined by Xxxxxx Brothers Inc. (after
obtaining the Issuer's approval) that is representative of a single transaction
in such market at such time by reference to the principal London office of
leading banks in the London interbank market; provided, however, that if Xxxxxx
Brothers Inc. is not a Broker-Dealer or does not quote a rate required to
determine LIBOR, LIBOR will be determined on the basis of the quotation or
quotations furnished by any other Broker-Dealer selected by the Issuer to
provide such rate or rates not being supplied by Xxxxxx Brothers Inc.; provided
further, that if Xxxxxx Brothers Inc. and/or a substitute Broker-Dealer are
required but unable to determine a rate in accordance with at least one of the
procedures provided above, LIBOR shall be the most recently determinable LIBOR.
If the number of Rate Period days shall be (i) 7 or more but fewer than 21 days,
such rate shall be the seven-day LIBOR rate; (ii) more than 21 but fewer than 49
days, such rate shall be one-month LIBOR rate; (iii) 49 or more but fewer than
77 days, such rate shall be the two-month LIBOR rate; (iv) 77 or more but fewer
than 112 days, such rate shall be the three-month LIBOR rate; (v) 112 or more
but fewer than 140 days, such rate shall be the four-month LIBOR rate; (vi) 140
or more but fewer than 168 days, such rate shall be the five-month LIBOR rate;
(vii) 168 or more but fewer 189 days, such rate shall be the six-month LIBOR
rate; (viii) 189 or more but fewer than 217 days, such rate shall be the
seven-month LIBOR rate; (ix) 217 or more but fewer than 252 days, such rate
shall be the eight-month LIBOR rate; (x) 252 or more but fewer than 287 days,
such rate shall be the nine-month LIBOR rate; (xi) 287 or more but fewer than
315 days, such rate shall be the ten-month LIBOR rate;
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(xii) 315 or more but fewer than 343 days, such rate shall be the eleven-month
LIBOR rate; and (xiii) 343 or more days but fewer than 365 days, such rate shall
be the twelve-month LIBOR rate.
"MARKET VALUE" means the market value of an asset of the
Issuer determined as follows: For equity securities, the value obtained from
readily available market quotations. If an equity security is not traded on an
exchange or not available from a Board-approved pricing service, the value
obtained from written broker-dealer quotations. For fixed-income securities, the
value obtained from readily available market quotations based on the last
updated sale price or the value obtained from a pricing service or the value
obtained from a written broker-dealer quotation from a dealer who has made a
market in the security. "Market Value" for other securities will mean the value
obtained pursuant to the Issuer's valuation procedures. If the market value of a
security cannot be obtained, or the Issuer's investment adviser determines that
the value of a security as so obtained does not represent the fair value of a
security, fair value for that security shall be determined pursuant to the
methodologies established by the Board of Directors.
"MAXIMUM RATE" means, on any date on which the Applicable Rate
is determined, the rate equal to the applicable percentage of the Reference
Rate, subject to upward but not downward adjustment in the discretion of the
Board of Directors after consultation with the Broker-Dealers, provided that
immediately following any such increase the Issuer would be in compliance with
the Tortoise Notes Basic Maintenance Amount.
"MINIMUM RATE" means, on any Auction Date with respect to a
Rate Period of [7] days or fewer, 70% of the AA Composite Commercial Paper Rate
at the close of business on the Business Day next preceding such Auction Date.
There shall be no Minimum Rate on any Auction Date with respect to a Rate Period
of more than the Standard Rate Period.
"MOODY'S" means Xxxxx'x Investors Service, Inc., a Delaware
corporation, and its successors at law.
"MOODY'S DISCOUNT FACTOR" means the discount factors set forth
in the Moody's Guidelines for use in calculating the Discounted Value of the
Issuer's assets in connection with Moody's ratings of Tortoise Notes.
"MOODY'S ELIGIBLE ASSETS" means assets of the Issuer set forth
in the Moody's Guidelines as eligible for inclusion in calculating the
Discounted Value of the Issuer's assets in connection with Moody's ratings of
Tortoise Notes.
"MOODY'S GUIDELINES" mean the guidelines provided by Moody's,
as may be amended from time to time, in connection with Moody's ratings of
Tortoise Notes.
"1940 ACT TORTOISE NOTES ASSET COVERAGE" means asset coverage,
as determined in accordance with Section 18(h) of the Investment Company Act, of
at least 300% with respect to all outstanding senior securities representing
indebtedness of the Issuer, including all Outstanding Tortoise Notes (or such
other asset coverage as may in the future be specified in or under the
Investment Company Act as the minimum asset coverage for senior securities
representing indebtedness of a closed-end investment company as a condition of
declaring dividends on its common shares), determined on the basis of values
calculated as of a time within 48 hours next preceding the time of such
determination.
"NOTES" means Securities of the Issuer ranking on a parity
with the Tortoise Notes that may be issued from time to time pursuant to the
Indenture.
"ORDER" shall have the meaning specified in Appendix A hereto.
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"ORIGINAL ISSUE DATE" means, with respect to Series C Tortoise
Notes, _____, 2005.
"OTHER RATING AGENCY" means each rating agency, if any, other
than Moody's or Fitch then providing a rating for the Tortoise Notes pursuant to
the request of the Issuer.
"OTHER RATING AGENCY DISCOUNT FACTOR" means the discount
factors set forth in the Other Rating Agency Guidelines of each Other Rating
Agency for use in calculating the Discounted Value of the Issuer's assets in
connection with the Other Rating Agency's rating of Tortoise Notes.
"OTHER RATING AGENCY ELIGIBLE ASSETS" means assets of the
Issuer set forth in the Other Rating Agency Guidelines of each Other Rating
Agency as eligible for inclusion in calculating the Discounted Value of the
Issuer's assets in connection with the Other Rating Agency's rating of Tortoise
Notes.
"OTHER RATING AGENCY GUIDELINES" mean the guidelines provided
by each Other Rating Agency, as may be amended from time to time, in connection
with the Other Rating Agency's rating of Tortoise Notes.
"OUTSTANDING" or "OUTSTANDING" means, as of any date, Tortoise
Notes theretofore issued by the Issuer except, without duplication, (i) any
Tortoise Notes theretofore canceled, redeemed or repurchased by the Issuer, or
delivered to the Trustee for cancellation or with respect to which the Issuer
has given notice of redemption and irrevocably deposited with the Paying Agent
sufficient funds to redeem such Tortoise Notes and (ii) any Tortoise Notes
represented by any certificate in lieu of which a new certificate has been
executed and delivered by the Issuer. Notwithstanding the foregoing, (A) in
connection with any Auction, any Series of Tortoise Notes as to which the Issuer
or any person known to the Auction Agent to be an Affiliate of the Issuer shall
be the Existing Holder thereof shall be disregarded and deemed not to be
Outstanding; and (B) for purposes of determining the Tortoise Notes Basic
Maintenance Amount, Tortoise Notes held by the Issuer shall be disregarded and
not deemed Outstanding but Tortoise Notes held by any Affiliate of the Issuer
shall be deemed Outstanding.
"PAYING AGENT" means BNY Midwest Trust Company unless and
until another entity appointed by a resolution of the Board of Directors enters
into an agreement with the Issuer to serve as paying agent, transfer agent,
registrar, and redemption agent with respect to the Tortoise Notes, which Paying
Agent may be the same as the Trustee or the Auction Agent.
"PERSON" or "PERSON" means and includes an individual, a
partnership, a trust, a company, an unincorporated association, a joint venture
or other entity or a government or any agency or political subdivision thereof.
"POTENTIAL BENEFICIAL OWNER," with respect to a series of
Tortoise Notes, shall mean a customer of a Broker-Dealer that is not a
Beneficial Owner of Tortoise Notes of such series but that wishes to purchase
Tortoise Notes of such series, or that is a Beneficial Owner of Tortoise Notes
of such series that wishes to purchase additional Tortoise Notes of such series.
"POTENTIAL HOLDER," with respect to Tortoise Notes of such
series, shall mean a Broker-Dealer (or any such other person as may be permitted
by the Company) that is not an Existing Holder of Tortoise Notes of such series
or that is an Existing Holder of Tortoise Notes of such series that wishes to
become the Existing Holder of additional Tortoise Notes of such series.
"RATE PERIOD" means, with respect to a Series of Tortoise
Notes, the period commencing on the Original Issue Date thereof and ending on
the date specified for such series on the Original Issue
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Date thereof and thereafter, as to such series, the period commencing on
the day following each Rate Period for such series and ending on the day
established for such series by the Issuer.
"RATING AGENCY" means each of Fitch (if Fitch is then rating
Tortoise Notes), Moody's (if Xxxxx'x is then rating Tortoise Notes) and any
Other Rating Agency.
"RATING AGENCY GUIDELINES" mean Fitch Guidelines (if Fitch is
then rating Tortoise Notes), Moody's Guidelines (if Xxxxx'x is then rating
Tortoise Notes) and any Other Rating Agency Guidelines.
"REFERENCE RATE" means, with respect to the determination of
the Maximum Rate and Default Rate, the greater of (i) the applicable AA
Composite Commercial Paper Rate (for a Rate Period of fewer than 184 days) or
the applicable Treasury Index Rate (for a Rate Period of 184 days or more), or
(ii) the applicable LIBOR rate.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"SECURITIES DEPOSITORY" means The Depository Trust Company and
its successors and assigns or any successor securities depository selected by
the Issuer that agrees to follow the procedures required to be followed by such
securities depository in connection with the Tortoise Notes Series C.
"SELL ORDER" shall have the meaning specified in Appendix A
hereto.
"SPECIAL RATE PERIOD" means a Rate Period that is not a
Standard Rate Period.
"SPECIFIC REDEMPTION PROVISIONS" means, with respect to any
Special Rate Period of more than one year, either, or any combination of a
period (a "Non-Call Period") determined by the Board of Directors after
consultation with the Broker-Dealers, during which the Tortoise Notes subject to
such Special Rate Period are not subject to redemption at the option of the
Issuer consisting of a number of whole years as determined by the Board of
Directors after consultation with the Broker-Dealers, during each year of which
the Tortoise Notes subject to such Special Rate Period shall be redeemable at
the Issuer's option and/or in connection with any mandatory redemption at a
price equal to the principal amount plus accrued but unpaid interest plus a
premium expressed as a percentage or percentages of $25,000 or expressed as a
formula using specified variables as determined by the Board of Directors after
consultation with the Broker-Dealers.
"STANDARD RATE PERIOD" means a Rate Period of [7] days.
"STATED MATURITY" with respect to Tortoise Notes Series C,
shall mean ________, 2045.
"SUBMISSION DEADLINE" means 1:00 p.m., Eastern Standard time,
on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Auction Agent as specified
by the Auction Agent from time to time.
"SUBMITTED BID" shall have the meaning specified in Appendix A
hereto.
"SUBMITTED HOLD ORDER" shall have the meaning specified in
Appendix A hereto.
"SUBMITTED ORDER" shall have the meaning specified in Appendix
A hereto.
"SUBMITTED SELL ORDER" shall have the meaning specified in
Appendix A hereto.
"SUFFICIENT CLEARING BIDS" shall have the meaning specified in
Appendix A hereto.
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"TORTOISE NOTES BASIC MAINTENANCE AMOUNT" as of any Valuation
Date has the meaning set forth in the Rating Agency Guidelines.
"TORTOISE NOTES SERIES C" means the Series C Tortoise Notes or
any other Notes hereinafter designated as Series C Tortoise Notes.
"TREASURY INDEX RATE" means the average yield to maturity for
actively traded marketable U.S. Treasury fixed interest rate securities having
the same number of 30-day periods to maturity as the length of the applicable
Rate Period, determined, to the extent necessary, by linear interpolation based
upon the yield for such securities having the next shorter and next longer
number of 30-day periods to maturity treating all Rate Periods with a length
greater than the longest maturity for such securities as having a length equal
to such longest maturity, in all cases based upon data set forth in the most
recent weekly statistical release published by the Board of Governors of the
Federal Reserve System (currently in H.15(519)); provided, however, if the most
recent such statistical release shall not have been published during the 15 days
preceding the date of computation, the foregoing computations shall be based
upon the average of comparable data as quoted to the Issuer by at least three
recognized dealers in U.S. Government securities selected by the Issuer.
"TRUSTEE" means BNY Midwest Trust Company or such other person
who is named as a trustee pursuant to the terms of the Indenture.
"VALUATION DATE" means every Friday, or, if such day is not a
Business Day, the next preceding Business Day; provided, however, that the first
Valuation Date may occur on any other date established by the Company; provided,
further, however, that such first Valuation Date shall be not more than one week
from the date on which Tortoise Notes Series C initially are issued.
SECTION 1.02 INTERPRETATION. References to sections, subsections,
clauses, sub-clauses, paragraphs and subparagraphs are to such sections,
subsections, clauses, sub-clauses, paragraphs and subparagraphs contained in
this supplemental indenture, as the case may be, unless specifically identified
otherwise.
Words importing the masculine gender include the feminine gender. Words
importing persons include firms, associations and corporations. Words importing
the singular number include the plural number and vice versa. Additional terms
are defined in the body of this Supplemental Indenture and the Appendices
hereto.
In the event that any term or provision contained herein with respect
to the Tortoise Notes shall conflict with or be inconsistent with any term or
provision contained in the Indenture, the terms and provisions of this
Supplemental Indenture shall govern.
ARTICLE II
NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND
USE OF PROCEEDS OF NOTES
SECTION 2.01 GENERAL TERMS.
(a) Designation:
(i) Series C: A series of Notes having an aggregate
principal amount of $__________, is designated "Series C Tortoise
Notes" ("Tortoise Notes Series C"). The principal amount of the
Tortoise Notes Series C shall be due and payable at the Stated
Maturity.
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The initial Rate Period for Tortoise Notes Series C shall be the period
from and including the Original Issue Date thereof to and including
_____, 2005. The Tortoise Notes Series C shall have an Applicable Rate
for the initial Rate Period equal to ___% per annum and an initial
Interest Payment Date of _____, 2005. Thereafter, the Applicable Rate
shall be determined in accordance with the Auction Procedures set forth
in Appendix A hereto, until the Stated Maturity. The Tortoise Notes
Series C shall have such other terms and conditions as are set forth
herein. The Tortoise Notes Series C shall constitute a separate series
of Notes of the Issuer.
(b) Subject to Section 2.03(i) hereof, the Board of
Directors of the Issuer may, in the future, without further consent of the
holders of the Tortoise Notes or the holders of shares of beneficial interest of
the Issuer, authorize an increase in the aggregate principal amount of an
Outstanding series of Tortoise Notes or the issuance of additional series of
Tortoise Notes, with the same terms and conditions of the respective series
herein described, except that the Applicable Rate for its initial Rate Period,
its initial Interest Payment Date and any other changes in the terms herein set
forth shall be as set forth in a supplemental indenture.
(c) The global securities representing Tortoise Notes, as
described in paragraph (d) below, shall be in substantially the form set forth
in Appendix B hereto, with such appropriate insertions, notations, legends and
other variations as are required or permitted by the Indenture or any
supplemental indenture. The Tortoise Notes and the rights and duties of the
Issuer, the Trustee, any Paying Agent, the Holders thereof (and of the
Securities of any other series), shall be subject to and governed by the
Indenture (including as it has been amended and supplemented by this
Supplemental Indenture and as it may be hereafter amended or supplemented by any
supplemental indenture thereto pursuant to the applicable provisions thereof)
insofar as the Indenture shall be applicable.
(d) Except as otherwise provided in this Section, the
Tortoise Notes in the form of one global note for each series shall be
registered in the name of the Securities Depository or its nominee and ownership
thereof shall be maintained in book-entry form by the Securities Depository for
the account of the Agent Members. Initially, each global note shall be
registered in the name of Cede & Co., as the nominee of The Depository Trust
Company. The global notes may be transferred, in whole but not in part, only to
the Securities Depository or a nominee of the Securities Depository or to a
successor Securities Depository selected or approved by the Issuer or to a
nominee of such successor Securities Depository. Each global note shall bear a
legend substantially to the following effect: "Except as otherwise provided in
the Indenture, this global note may be transferred, in whole but not in part,
only to another nominee of the Securities Depository (as defined in the
Indenture) or to a successor Securities Depository or to a nominee of a
successor Securities Depository."
SECTION 2.02 INTEREST.
(a) The Holders of any Series of Tortoise Notes will bear
interest on their Tortoise Notes at the Applicable Rate, determined as set forth
in paragraph (c) of this Section 2.02, and no more, payable on the respective
dates determined as set forth in paragraph (b) of this Section 2.02. Interest on
the Outstanding Tortoise Notes of any series issued on the Original Issue Date
shall accrue from the Original Issue Date.
(b) (i) Interest shall be payable, subject to
subparagraph (b)(ii) of this Section 2.02, on each Series of Tortoise Notes,
with respect to any Rate Period on the first Business Day following the last day
of such Rate Period; provided, however, if the Rate Period is greater than 30
days then on a monthly basis on the first Business Day of each month within such
Rate Period, not including the initial Rate Period, and on the Business Day
following the last day of such Rate Period.
9
(ii) If a day for payment of interest resulting from
the application of subparagraph (b)(i) above is not a Business Day,
then the Interest Payment Date shall be the first Business Day
following such day for payment of interest in the case of a Series of
Tortoise Notes designated as "Series C."
(iii) The Issuer shall pay to the Paying Agent not
later than 3:00 p.m., New York City time, on the Business Day next
preceding each Interest Payment Date for each Series of Tortoise Notes,
an aggregate amount of funds available on the next Business Day in the
City of New York, New York, equal to the interest to be paid to all
Holders of such Tortoise Notes on such Interest Payment Date. The
Issuer shall not be required to establish any reserves for the payment
of interest.
(iv) All moneys paid to the Paying Agent for the
payment of interest shall be held in trust for the payment of such
interest by the Paying Agent for the benefit of the Holders specified
in subparagraph (b)(v) of this Section 2.02. Any moneys paid to the
Paying Agent in accordance with the foregoing but not applied by the
Paying Agent to the payment of interest, including interest earned on
such moneys, will, to the extent permitted by law, be repaid to the
Issuer at the end of 90 days from the date on which such moneys were to
have been so applied.
(v) Each interest payment on a Series of Tortoise
Notes shall be paid on the Interest Payment Date therefor to the
Holders of that series as their names appear on the security ledger or
security records of the Issuer on the Business Day next preceding such
Interest Payment Date. Interest in arrears for any past Rate Period may
be paid at any time, without reference to any regular Interest Payment
Date, to the Holders as their names appear on the books or records of
the Issuer on such date, not exceeding 15 days preceding the payment
date thereof, as may be fixed by the Board of Directors. No interest
will be payable in respect of any Interest Payment or payments which
may be in arrears.
(c) (i) The interest rate on Outstanding Tortoise Notes
of each Series during the period from and after the Original Issue Date to and
including the last day of the initial Rate Period therefor shall be equal to the
rate per annum set forth under Section 2.01(a) above. For each subsequent Rate
Period with respect to the Tortoise Notes Outstanding thereafter, the interest
rate shall be equal to the rate per annum that results from an Auction;
provided, however, that if an Auction for any subsequent Rate Period of a Series
of Tortoise Notes is not held for any reason or if Sufficient Clearing Bids have
not been made in an Auction (other than as a result of all Series of Tortoise
Notes being the subject of Submitted Hold Orders), then the interest rate on a
Series of Tortoise Notes for any such Rate Period shall be the Maximum Rate
(except during a Default Period when the interest rate shall be the Default
Rate, as set forth in Section 2.02(c)(ii) below). The All Hold Rate will apply
automatically following an Auction in which all of the Outstanding Series of
Tortoise Notes are subject (or are deemed to be subject) to Hold Orders. The
rate per annum at which interest is payable on a Series of Tortoise Notes as
determined pursuant to this Section 2(c)(i) shall be the "Applicable Rate."
(ii) Subject to the cure provisions below, a "Default
Period" with respect to a particular Series will commence on any date
the Issuer fails to deposit irrevocably in trust in same-day funds,
with the Paying Agent by 12:00 noon, New York City time, (A) the full
amount of any redemption price (the "Redemption Price") payable on the
date fixed for redemption (the "Redemption Date") (a "Redemption
Default," which shall constitute an Event of Default pursuant to
Section 5.1(7) of the Original Indenture) or (B) the full amount of any
accrued interest on that Series payable on the Interest Payment Date
(an "Interest Default" and together with a Redemption Default,
hereinafter referred to as "Default"). Subject to the cure provisions
of Section 2(c)(iii) below, a Default Period with respect to an
Interest Default or a Redemption
10
Default shall end on the Business Day on which, by 12:00 noon, New York
City time, all unpaid interest and any unpaid Redemption Price shall
have been deposited irrevocably in trust in same-day funds with the
Paying Agent. In the case of an Interest Default, the Applicable Rate
for each Rate Period commencing during a Default Period will be equal
to the Default Rate, and each subsequent Rate Period commencing after
the beginning of a Default Period shall be a Standard Rate Period;
provided, however, that the commencement of a Default Period will not
by itself cause the commencement of a new Rate Period. No Auction shall
be held during a Default Period with respect to an Interest Default
applicable to that Series of Tortoise Notes.
(iii) No Default Period with respect to an Interest
Default or Redemption Default shall be deemed to commence if the amount
of any interest or any Redemption Price due (if such default is not
solely due to the willful failure of the Issuer) is deposited
irrevocably in trust, in same-day funds with the Paying Agent by 12:00
noon, New York City time within three Business Days after the
applicable Interest Payment Date or Redemption Date, together with an
amount equal to the Default Rate applied to the amount of such
non-payment based on the actual number of days comprising such period
divided by 360 for each Series. The Default Rate shall be equal to the
Reference Rate multiplied by three (3).
(iv) The amount of interest per Tortoise Note payable
on each Interest Payment Date of each Rate Period of less than one (1)
year (or in respect of interest on another date in connection with a
redemption during such Rate Period) shall be computed by multiplying
the Applicable Rate (or the Default Rate) for such Rate Period (or a
portion thereof) by a fraction, the numerator of which will be the
number of days in such Rate Period (or portion thereof) that such
Tortoise Notes were outstanding and for which the Applicable Rate or
the Default Rate was applicable and the denominator of which will be
360, multiplying the amount so obtained by $25,000, and rounding the
amount so obtained to the nearest cent. During any Rate Period of one
(1) year or more, the amount of interest per Tortoise Note payable on
any Interest Payment Date (or in respect of interest on another date in
connection with a redemption during such Rate Period) shall be computed
as described in the preceding sentence.
(d) Any Interest Payment made on any Series of Tortoise
Notes shall first be credited against the earliest accrued but unpaid interest
due with respect to such Series.
SECTION 2.03 REDEMPTION.
(a) (i) After the initial Rate Period, subject to the
provisions of this Section 2.03 and to the extent permitted under the Investment
Company Act, the Issuer may, at its option, redeem in whole or in part out of
funds legally available therefor a series of Tortoise Notes herein designated as
(A) having a Rate Period of one year or less, on the Business Day after the last
day of such Rate Period by delivering a notice of redemption not less than 15
days and not more than 40 days prior to the date fixed for such redemption, at a
redemption price equal to the aggregate principal amount, plus an amount equal
to accrued but unpaid interest thereon (whether or not earned) to the date fixed
for redemption ("Redemption Price"), or (B) having a Rate Period of more than
one year, on any Business Day prior to the end of the relevant Rate Period by
delivering a notice of redemption not less than 15 days and not more than 40
days prior to the date fixed for such redemption, at the Redemption Price, plus
a redemption premium, if any, determined by the Board of Directors after
consultation with the Broker-Dealers and set forth in any applicable Specific
Redemption Provisions at the time of the designation of such Rate Period as set
forth in Section 2.04 hereof; provided, however, that during a Rate Period of
more than one year no series of Tortoise Notes will be subject to optional
redemption except in accordance with any Specific Redemption Provisions approved
by the Board of Directors after consultation with the Broker-Dealers at the time
of the designation of such Rate Period. Notwithstanding the foregoing, the
Issuer shall not give a
11
notice of or effect any redemption pursuant to this Section 2.03(a)(i) unless,
on the date on which the Issuer intends to give such notice and on the date of
redemption (a) the Issuer has available certain Deposit Securities with maturity
or tender dates not later than the day preceding the applicable redemption date
and having a value not less than the amount (including any applicable premium)
due to Holders of a series of Tortoise Notes by reason of the redemption of such
Tortoise Notes on such date fixed for the redemption and (b) the Issuer would
have Eligible Assets with an aggregate Discounted Value at least equal the
Tortoise Notes Basic Maintenance Amount immediately subsequent to such
redemption, if such redemption were to occur on such date, it being understood
that the provisions of paragraph (d) of this Section 2.03 shall be applicable in
such circumstances in the event the Issuer makes the deposit and takes the other
action required thereby.
(ii) If the Issuer fails to maintain, as of any
Valuation Date, Eligible Assets with an aggregate Discounted Value at
least equal to the Tortoise Notes Basic Maintenance Amount or, as of
the last Business Day of any month, the 1940 Act Tortoise Notes Asset
Coverage, and such failure is not cured within ten Business Days
following such Valuation Date in the case of a failure to maintain the
Tortoise Notes Basic Maintenance Amount or on the last Business Day of
the following month in the case of a failure to maintain the 1940 Act
Tortoise Notes Asset Coverage as of such last Business Day (each an
"Asset Coverage Cure Date"), the Tortoise Notes will be subject to
mandatory redemption out of funds legally available therefor. The
aggregate principal amount of Tortoise Notes to be redeemed in such
circumstances will be equal to the lesser of (A) the minimum principal
amount of Tortoise Notes the redemption of which, if deemed to have
occurred immediately prior to the opening of business on the relevant
Asset Coverage Cure Date, would result in the Issuer having Eligible
Assets with an aggregate Discounted Value at least equal to the
Tortoise Notes Basic Maintenance Amount, or sufficient to satisfy 1940
Act Tortoise Notes Asset Coverage, as the case may be, in either case
as of the relevant Asset Coverage Cure Date (provided that, if there is
no such minimum principal amount of Tortoise Notes the redemption of
which would have such result, all Tortoise Notes then Outstanding will
be redeemed), and (B) the maximum principal amount of Tortoise Notes
that can be redeemed out of funds expected to be available therefor on
the Mandatory Redemption Date at the Mandatory Redemption Price set
forth in subparagraph (a)(iii) of this Section 2.03.
(iii) In determining the Tortoise Notes required to be
redeemed in accordance with the foregoing Section 2.03(a)(ii), the
Issuer shall allocate the aggregate principal amount of Tortoise Notes
required to be redeemed to satisfy the Tortoise Notes Basic Maintenance
Amount or the 1940 Act Tortoise Notes Asset Coverage, as the case may
be, pro rata among the Holders of Tortoise Notes in proportion to the
aggregate principal amount of Tortoise Notes they hold, by lot or by
such other method as the Issuer shall deem equitable, subject to the
further provisions of this subparagraph (iii). The Issuer shall effect
any required mandatory redemption pursuant to subparagraph (a)(ii) of
this Section 2.03 no later than 40 days after the Asset Coverage Cure
Date (the "Mandatory Redemption Date"), except that if the Issuer does
not have funds legally available for the redemption of, or is not
otherwise legally permitted to redeem, the aggregate principal amount
of Tortoise Notes which would be required to be redeemed by the Issuer
under clause (A) of subparagraph (a)(ii) of this Section 2.03 if
sufficient funds were available, or the Issuer otherwise is unable to
effect such redemption on or prior to such Mandatory Redemption Date,
the Issuer shall redeem those Tortoise Notes, and other Notes, on the
earliest practicable date on which the Issuer will have such funds
available, upon notice pursuant to Section 2.03(b) to record owners of
the Tortoise Notes to be redeemed and the Paying Agent. The Issuer will
deposit with the Paying Agent funds sufficient to redeem the specified
aggregate principal amount of Tortoise Notes with respect to a
redemption required under subparagraph (a)(ii) of this Section 2.03, by
1:00 p.m., New York City time, of the Business Day immediately
preceding the Mandatory Redemption Date. If fewer than all of the
Outstanding Tortoise Notes are to be
12
redeemed pursuant to this Section 2.03(a)(iii), the aggregate principal
amount of Tortoise Notes to be redeemed shall be redeemed pro rata from
the Holders of such Tortoise Notes in proportion to the aggregate
principal amount of such Tortoise Notes held by such Holders, by lot or
by such other method as the Issuer shall deem fair and equitable,
subject, however, to the terms of any applicable Specific Redemption
Provisions. "Mandatory Redemption Price" means the Redemption Price
plus (in the case of a Rate Period of one year or more only) a
redemption premium, if any, determined by the Board of Directors after
consultation with the Broker-Dealers and set forth in any applicable
Specific Redemption Provisions.
(b) In the event of a redemption pursuant to Section
2.03(a), the Issuer will file a notice of its intention to redeem with the
Commission so as to provide at least the minimum notice required under Rule
23c-2 under the Investment Company Act or any successor provision. In addition,
the Issuer shall deliver a notice of redemption to the Auction Agent and the
Trustee (the "Notice of Redemption") containing the information set forth below
(i) in the case of an optional redemption pursuant to subparagraph (a)(i) above,
one Business Day prior to the giving of notice to the Holders and (ii) in the
case of a mandatory redemption pursuant to subparagraph (a)(ii) above, on or
prior to the 30th day preceding the Mandatory Redemption Date. The Trustee will
use its reasonable efforts to provide notice to each Holder of Tortoise Notes
called for redemption by electronic or other reasonable means not later than the
close of business on the Business Day immediately following the day on which the
Trustee determines the Tortoise Notes to be redeemed (or, during a Default
Period with respect to such Tortoise Notes, not later than the close of business
on the Business Day immediately following the day on which the Trustee receives
Notice of Redemption from the Issuer) The Trustee shall confirm such notice in
writing not later than the close of business on the third Business Day preceding
the date fixed for redemption by providing the Notice of Redemption to each
Holder of Tortoise Notes called for redemption, the Paying Agent (if different
from the Trustee) and the Securities Depository. Notice of Redemption will be
addressed to the registered owners of each Series of Tortoise Notes at their
addresses appearing on the books or records of the Issuer. Such Notice of
Redemption will set forth (i) the date fixed for redemption, (ii) the principal
amount and identity of Tortoise Notes to be redeemed, (iii) the redemption price
(specifying the amount of accrued interest to be included therein and any
redemption premium, if any), (iv) that interest on the Tortoise Notes to be
redeemed will cease to accrue on such date fixed for redemption, and (v) the
provision under which redemption shall be made. No defect in the Notice of
Redemption or in the transmittal or mailing thereof will affect the validity of
the redemption proceedings, except as required by applicable law. If fewer than
all Tortoise Notes held by any Holder are to be redeemed, the Notice of
Redemption mailed to such Holder shall also specify the principal amount of
Tortoise Notes to be redeemed from such Holder.
(c) Notwithstanding the provisions of paragraph (a) of this
Section 2.03, no Tortoise Notes may be redeemed unless all interest on the
Outstanding Tortoise Notes and all Notes of the Issuer ranking on a parity with
the Tortoise Notes, have been or are being contemporaneously paid or set aside
for payment; provided, however, that the foregoing shall not prevent the
purchase or acquisition of all Outstanding Tortoise Notes pursuant to the
successful completion of an otherwise lawful purchase or exchange offer made on
the same terms to, and accepted by, Holders of all Outstanding Tortoise Notes.
(d) Upon the deposit of funds sufficient to redeem any
Tortoise Notes with the Paying Agent and the giving of the Notice of Redemption
to the Trustee under paragraph (b) of this Section 2.03, interest on such
Tortoise Notes shall cease to accrue and such Tortoise Notes shall no longer be
deemed to be Outstanding for any purpose (including, without limitation, for
purposes of calculating whether the Issuer has maintained the requisite Tortoise
Notes Basic Maintenance Amount or the 1940 Act Tortoise Notes Asset Coverage),
and all rights of the Holder of the Tortoise Notes so called for redemption
shall cease and terminate, except the right of such Holder to receive the
redemption price specified herein, but without any interest or other additional
amount. Such redemption price shall be paid
13
by the Paying Agent to the nominee of the Securities Depository. The Issuer
shall be entitled to receive from the Paying Agent, promptly after the date
fixed for redemption, any cash deposited with the Paying Agent in excess of (i)
the aggregate redemption price of the Tortoise Notes called for redemption on
such date and (ii) such other amounts, if any, to which Holders of the Tortoise
Notes called for redemption may be entitled. Any funds so deposited that are
unclaimed at the end of two years from such redemption date shall, to the extent
permitted by law, be paid to the Issuer, after which time the Holders of
Tortoise Notes so called for redemption may look only to the Issuer for payment
of the redemption price and all other amounts, if any, to which they may be
entitled. The Issuer shall be entitled to receive, from time to time after the
date fixed for redemption, any interest earned on the funds so deposited.
(e) To the extent that any redemption for which Notice of
Redemption has been given is not made by reason of the absence of legally
available funds therefor, or is otherwise prohibited, such redemption shall be
made as soon as practicable to the extent such funds become legally available or
such redemption is no longer otherwise prohibited. Failure to redeem any Series
of Tortoise Notes shall be deemed to exist at any time after the date specified
for redemption in a Notice of Redemption when the Issuer shall have failed, for
any reason whatsoever, to deposit in trust with the Paying Agent the redemption
price with respect to any Tortoise Notes for which such Notice of Redemption has
been given. Notwithstanding the fact that the Issuer may not have redeemed any
Tortoise Notes for which a Notice of Redemption has been given, interest may be
paid on a Series of Tortoise Notes and shall include those Tortoise Notes for
which Notice of Redemption has been given but for which deposit of funds has not
been made.
(f) All moneys paid to the Paying Agent for payment of the
redemption price of any Tortoise Notes called for redemption shall be held in
trust by the Paying Agent for the benefit of Holders of Tortoise Notes to be
redeemed.
(g) So long as any Tortoise Notes are held of record by the
nominee of the Securities Depository, the redemption price for such Tortoise
Notes will be paid on the date fixed for redemption to the nominee of the
Securities Depository for distribution to Agent Members for distribution to the
persons for whom they are acting as agent.
(h) Except for the provisions described above, nothing
contained herein limits any right of the Issuer to purchase or otherwise acquire
any Tortoise Notes outside of an Auction at any price, whether higher or lower
than the price that would be paid in connection with an optional or mandatory
redemption, so long as, at the time of any such purchase, there is no arrearage
in the payment of interest on, or the mandatory or optional redemption price
with respect to, any series of Tortoise Notes for which Notice of Redemption has
been given and the Issuer is in compliance with the 1940 Act Tortoise Notes
Asset Coverage and has Eligible Assets with an aggregate Discounted Value at
least equal to the Tortoise Notes Basic Maintenance Amount after giving effect
to such purchase or acquisition on the date thereof. If fewer than all the
Outstanding Tortoise Notes of any series are redeemed or otherwise acquired by
the Issuer, the Issuer shall give notice of such transaction to the Trustee, in
accordance with the procedures agreed upon by the Board of Directors.
(i) The Board of Directors may, without further consent of
the holders of the Tortoise Notes or the holders of shares of capital stock of
the Issuer, authorize, create or issue any class or series of Notes, including
other series of Tortoise Notes, ranking prior to or on a parity with the
Tortoise Notes to the extent permitted by the Investment Company Act, if, upon
issuance, either (A) the net proceeds from the sale of such Notes (or such
portion thereof needed to redeem or repurchase the Outstanding Tortoise Notes)
are deposited with the Trustee in accordance with Section 2.03(d), Notice of
Redemption as contemplated by Section 2.03(b) has been delivered prior thereto
or is sent promptly thereafter, and such proceeds are used to redeem all
Outstanding Tortoise Notes or (B) the Issuer would
14
meet the 1940 Act Tortoise Notes Asset Coverage, the Tortoise Notes Basic
Maintenance Amount and the requirements of Section 2.08 hereof.
SECTION 2.04 DESIGNATION OF RATE PERIOD.
(a) The initial Rate Period for each series of Tortoise
Notes is as set forth under "Designation" above. The Issuer will designate the
duration of subsequent Rate Periods of each series of Tortoise Notes; provided,
however, that no such designation is necessary for a Standard Rate Period and,
provided further, that any designation of a Special Rate Period shall be
effective only if (i) notice thereof shall have been given as provided herein,
(ii) any failure to pay in a timely manner to the Trustee the full amount of any
interest on, or the redemption price of, Tortoise Notes shall have been cured as
provided above, (iii) Sufficient Clearing Bids shall have existed in an Auction
held on the Auction Date immediately preceding the first day of such proposed
Special Rate Period, (iv) if the Issuer shall have mailed a Notice of Redemption
with respect to any Tortoise Notes, the redemption price with respect to such
Tortoise Notes shall have been deposited with the Paying Agent, and (v) in the
case of the designation of a Special Rate Period, the Issuer has confirmed that
as of the Auction Date next preceding the first day of such Special Rate Period,
it has Eligible Assets with an aggregate Discounted Value at least equal to the
Tortoise Notes Basic Maintenance Amount, and the Issuer has consulted with the
Broker-Dealers and has provided notice of such designation and otherwise
complied with the Rating Agency Guidelines.
(b) If the Issuer proposes to designate any Special Rate
Period, not fewer than 7 (or two Business Days in the event the duration of the
Rate Period prior to such Special Rate Period is fewer than 8 days) nor more
than 30 Business Days prior to the first day of such Special Rate Period, notice
shall be (i) made by press release and (ii) communicated by the Issuer by
telephonic or other means to the Trustee and confirmed in writing promptly
thereafter. Each such notice shall state (A) that the Issuer proposes to
exercise its option to designate a succeeding Special Rate Period, specifying
the first and last days thereof and (B) that the Issuer will by 3:00 p.m., New
York City time, on the second Business Day next preceding the first day of such
Special Rate Period, notify the Auction Agent and the Trustee, who will promptly
notify the Broker-Dealers, of either (x) its determination, subject to certain
conditions, to proceed with such Special Rate Period, subject to the terms of
any Specific Redemption Provisions, or (y) its determination not to proceed with
such Special Rate Period, in which latter event the succeeding Rate Period shall
be a Standard Rate Period.
No later than 3:00 p.m., New York City time, on the second Business Day
next preceding the first day of any proposed Special Rate Period, the Issuer
shall deliver to the Auction Agent and Trustee, who will promptly deliver to the
Broker-Dealers and Existing Holders, either:
(i) a notice stating (A) that the Issuer has
determined to designate the next succeeding Rate Period as a Special
Rate Period, specifying the first and last days thereof and (B) the
terms of any Specific Redemption Provisions; or
(ii) a notice stating that the Issuer has determined
not to exercise its option to designate a Special Rate Period.
If the Issuer fails to deliver either such notice with respect to any
designation of any proposed Special Rate Period to the Auction Agent or is
unable to make the confirmation provided in clause (v) of Paragraph (a) of this
Section 2.04 by 3:00 p.m., New York City time, on the second Business Day next
preceding the first day of such proposed Special Rate Period, the Issuer shall
be deemed to have delivered a notice to the Auction Agent with respect to such
Rate Period to the effect set forth in clause (ii) above, thereby resulting in a
Standard Rate Period.
15
SECTION 2.05 RESTRICTIONS ON TRANSFER. Tortoise Notes may be
transferred only (a) pursuant to an order placed in an Auction, (b) to or
through a Broker-Dealer or (c) to the Issuer or any Affiliate. Notwithstanding
the foregoing, a transfer other than pursuant to an Auction will not be
effective unless the selling Existing Holder or the Agent Member of such
Existing Holder, in the case of an Existing Holder whose Tortoise Notes are
listed in its own name on the books of the Auction Agent, or the Broker-Dealer
or Agent Member of such Broker-Dealer, in the case of a transfer between persons
holding Tortoise Notes through different Broker-Dealers, advises the Auction
Agent of such transfer. The certificates representing the Tortoise Notes issued
to the Securities Depository will bear legends with respect to the restrictions
described above and stop-transfer instructions will be issued to the Transfer
Agent and/or Registrar.
SECTION 2.06 1940 ACT TORTOISE NOTES ASSET COVERAGE. The Issuer shall
maintain, as of the last Business Day of each month in which any Tortoise Notes
are Outstanding, asset coverage with respect to the Tortoise Notes which is
equal to or greater than the 1940 Act Tortoise Notes Asset Coverage; provided,
however, that Section 2.03(a)(ii) shall be the sole remedy in the event the
Issuer fails to do so.
SECTION 2.07 TORTOISE NOTES BASIC MAINTENANCE AMOUNT. So long as the
Tortoise Notes are Outstanding and any Rating Agency is then rating the Tortoise
Notes, the Issuer shall maintain, as of each Valuation Date, Eligible Assets
having an aggregate Discounted Value equal to or greater than the Tortoise Notes
Basic Maintenance Amount; provided, however, that Section 2.03(a)(ii) shall be
the sole remedy in the event the Issuer fails to do so.
SECTION 2.08 CERTAIN OTHER RESTRICTIONS.
(a) For so long as any Tortoise Notes are Outstanding and
any Rating Agency is then rating the Tortoise Notes, the Issuer will not engage
in certain proscribed transactions set forth in the Rating Agency Guidelines,
unless it has received written confirmation from each such Rating Agency that
proscribes the applicable transaction in its Rating Agency Guidelines that any
such action would not impair the rating then assigned by such Rating Agency to a
Series of Tortoise Notes.
(b) For so long as any Tortoise Notes are Outstanding, the
Issuer will not declare, pay or set apart for payment any dividend or other
distribution (other than a dividend or distribution paid in shares of, or
options, warrants or rights to subscribe for or purchase, common shares or other
shares of capital stock of the Issuer) upon any class of shares of capital stock
of the Issuer, unless, in every such case, immediately after such transaction,
the 1940 Act Tortoise Notes Asset Coverage would be achieved after deducting the
amount of such dividend, distribution, or purchase price, as the case may be;
provided, however, that dividends may be declared upon any preferred shares of
capital stock of the Issuer if the Tortoise Notes and any other senior
securities representing indebtedness of the Issuer have an asset coverage of at
least 200% at the time of declaration thereof, after deducting the amount of
such dividend.
(c) A declaration of a dividend or other distribution on or
purchase or redemption of any common or preferred shares of capital stock of the
Issuer is prohibited (i) at any time that an Event of Default under the
Indenture has occurred and is continuing, (ii) if after giving effect to such
declaration, the Issuer would not have Eligible Assets with an aggregate
Discounted Value at least equal to the Tortoise Notes Basic Maintenance Amount
or the 1940 Act Tortoise Notes Asset Coverage, or (iii) the Issuer has not
redeemed the full amount of Tortoise Notes required to be redeemed by any
provisions for mandatory redemption contained herein.
SECTION 2.09 COMPLIANCE PROCEDURES FOR ASSET MAINTENANCE TESTS. For
so long as any Tortoise Notes are Outstanding and any Rating Agency is then
rating such Tortoise Notes:
16
(a) As of each Valuation Date, the Issuer shall determine in
accordance with the procedures specified herein (i) the Market Value of each
Eligible Asset owned by the Issuer on that date, (ii) the Discounted Value of
each such Eligible Asset using the Discount Factors, (iii) whether the Tortoise
Notes Basic Maintenance Amount is met as of that date, (iv) the value of the
total assets of the Issuer, less all liabilities, and (v) whether the 1940 Act
Tortoise Notes Asset Coverage is met as of that date.
(b) Upon any failure to maintain the required Tortoise Notes
Basic Maintenance Amount or 1940 Act Tortoise Notes Asset Coverage on any
Valuation Date, the Issuer may use reasonable commercial efforts (including,
without limitation, altering the composition of its portfolio, purchasing
Tortoise Notes outside of an Auction or in the event of a failure to file a
Rating Agency Certificate (as defined below) on a timely basis, submitting the
requisite Rating Agency Certificate) to re-attain (or certify in the case of a
failure to file on a timely basis, as the case may be) the required Tortoise
Notes Basic Maintenance Amount or 1940 Act Tortoise Notes Asset Coverage on or
prior to the Asset Coverage Cure Date.
(c) Compliance with the Tortoise Notes Basic Maintenance
Amount and 1940 Act Tortoise Notes Asset Coverage tests shall be determined with
reference to those Tortoise Notes which are deemed to be Outstanding hereunder.
(d) The Issuer shall deliver to each Rating Agency which is
then rating Tortoise Notes and any other party specified in the Rating Agency
Guidelines all certificates that are set forth in the respective Rating Agency
Guidelines regarding 1940 Act Tortoise Notes Asset Coverage, Tortoise Notes
Basic Maintenance Amount and/or related calculations at such times and
containing such information as set forth in the respective Rating Agency
Guidelines (each, a "Rating Agency Certificate").
(e) In the event that any Rating Agency Certificate is not delivered
within the time periods set forth in the Rating Agency Guidelines, the Issuer
shall be deemed to have failed to maintain the Tortoise Notes Basic Maintenance
Amount or the 1940 Act Tortoise Notes Asset Coverage, as the case may be, on
such Valuation Date for purposes of Section 2.09(b). In the event that any
Rating Agency Certificate with respect to an applicable Asset Coverage Cure Date
is not delivered within the time periods set forth in the Rating Agency
Guidelines, the Issuer shall be deemed to have failed to have Eligible Assets
with an aggregate Discounted Value at least equal to the Tortoise Notes Basic
Maintenance Amount or to meet the 1940 Act Tortoise Notes Asset Coverage, as the
case may be, as of the related Valuation Date, and such failure shall be deemed
not to have been cured as of such Asset Coverage Cure Date for purposes of the
mandatory redemption provisions.
SECTION 2.10 DELIVERY OF NOTES. Upon the execution and delivery of
this Supplemental Indenture, the Issuer shall execute and deliver to the Trustee
and the Trustee shall authenticate the Tortoise Notes and deliver them to The
Depository Trust Company and as hereinafter in this Section provided.
Prior to the delivery by the Trustee of any of the Tortoise Notes,
there shall have been filed with or delivered to the Trustee the following:
(a) A resolution duly adopted by the Issuer, certified by
the Secretary or other Authorized Officer thereof, authorizing the execution and
delivery of this Supplemental Indenture and the issuance of the Tortoise Notes.
(b) Duly executed copies of this Supplemental Indenture and
a copy of the Indenture.
17
(c) Rating letters from each Rating Agency rating the
Tortoise Notes.
(d) An opinion of Counsel pursuant to Sections 3.03 and 9.03
of the Original Indenture.
SECTION 2.11 TRUSTEE'S AUTHENTICATION CERTIFICATE. The Trustee's
authentication certificate upon the Tortoise Notes shall be substantially in the
forms provided in Appendix C hereto. No Tortoise Note shall be secured hereby or
entitled to the benefit hereof, or shall be valid or obligatory for any purpose,
unless a certificate of authentication, substantially in such form, has been
duly executed by the Trustee; and such certificate of the Trustee upon any
Tortoise Note shall be conclusive evidence and the only competent evidence that
such Bond has been authenticated and delivered hereunder. The Trustee's
certificate of authentication shall be deemed to have been duly executed by it
if manually signed by an authorized officer of the Trustee, but it shall not be
necessary that the same person sign the certificate of authentication on all of
the Tortoise Notes issued hereunder.
ARTICLE III
GENERAL PROVISIONS
SECTION 3.01 TRUSTEE AS PAYING AGENT. The Trustee shall serve as
Paying Agent, Transfer Agent and Registrar unless and until another entity
appointed by a resolution of the Board of Directors enters into an agreement
with the Issuer to serve as Paying Agent, Transfer Agent and Registrar.
SECTION 3.02 THE ISSUER TO PROVIDE FUNDS FOR INTEREST AND
REDEMPTIONS. Not later than 3:00 p.m. on the Business Day preceding each
Interest Payment Date, the Issuer shall deposit with the Paying Agent an
aggregate amount of federal funds or similar same-day funds equal to the
declared interest to be paid to Holders on such Interest Payment Date and shall
give the Paying Agent irrevocable instructions to apply such funds to the
payment of such interest on such Interest Payment Date.
If the Issuer shall give a Notice of Redemption, then by 12:00 noon on
the date fixed for redemption, the Issuer shall deposit in trust with the Paying
Agent an aggregate amount of federal funds or similar same-day funds sufficient
to redeem such Tortoise Notes called for redemption and shall give the Paying
Agent irrevocable instructions and authority to pay the redemption price to the
Holders of Tortoise Notes called for redemption upon surrender of the
certificate or certificates therefor.
SECTION 3.03 DISBURSING INTEREST AND REDEMPTION PRICE. After receipt
of the federal funds or similar same-day funds and instructions from the Issuer,
the Paying Agent shall pay to the Holders (or former Holders) entitled thereto
(i) on each corresponding Interest Payment Date, interest on the Tortoise Notes,
and (ii) on any date fixed for redemption, the redemption price of any Tortoise
Notes called for redemption. The amount of interest for any Rate Period to be
paid by the Paying Agent to Holders will be determined by the Issuer as set
forth in this Supplemental Indenture. The redemption price to be paid by the
Paying Agent to the Holders of any Tortoise Notes called for redemption will be
determined as set forth in this Supplemental Indenture. The Paying Agent shall
have no duty to determine the redemption price and may rely conclusively on the
amount thereof set forth in the Notice of Redemption.
SECTION 3.04 ORIGINAL ISSUE OF TORTOISE NOTE AUTHENTICATION
CERTIFICATES. On the Original Issue Date for any Tortoise Note, one certificate
for Tortoise Notes shall be issued by the Issuer and registered in the name of
Cede & Co., as nominee of the Securities Depository, and countersigned by the
Paying Agent.
SECTION 3.05 REGISTRATION OF TRANSFER OR EXCHANGE OF TORTOISE NOTES.
The Tortoise Notes shall be registered solely in the name of the Securities
Depository or its nominee. If the Securities
18
Depository shall give notice of its intention to resign as such, and if the
Issuer shall not have selected a substitute Securities Depository acceptable to
the Paying Agent prior to such resignation, then, upon such resignation of the
Securities Depository, the Tortoise Notes, at the Issuer's request and expense,
may be registered for transfer or exchange, and new certificates thereupon shall
be issued in the name of the designated transferee or transferees, upon
surrender of the old certificate in form deemed by the Paying Agent to be
endorsed properly for transfer with (a) all necessary endorsers' signatures
guaranteed in such manner and form and by such guarantor as the Paying Agent may
reasonably require, (b) such assurances as the Paying Agent shall deem necessary
or appropriate to evidence the genuineness and effectiveness of each necessary
endorsement and (c) satisfactory evidence of compliance with all applicable laws
relating to the collection of taxes in connection with any registration of
transfer or exchange or funds necessary for the payment of such taxes. If there
is no Securities Depository, at the Issuer's option and upon its receipt of such
documents as it deems appropriate, any Tortoise Notes may be registered in the
note register in the name of the Beneficial Owner thereof, and such Beneficial
Owner thereupon will be entitled to receive certificates therefor and required
to deliver certificates thereof upon transfer or exchange thereof at the
Issuer's expense.
SECTION 3.06 REMOVAL OF LEGEND. Any request for removal of a legend
indicating a restriction on transfer from a certificate evidencing Tortoise
Notes shall be accompanied by an opinion of counsel stating that such legend may
be removed and such Tortoise Notes may be transferred free of the restriction
described in such legend, said opinion to be delivered under cover of a letter
from an officer of the Issuer authorizing the Paying Agent to remove the legend
on the basis of said opinion.
SECTION 3.07 LOST, STOLEN OR DESTROYED TORTOISE NOTE AUTHENTICATION
CERTIFICATES. The Paying Agent shall, at the Holder's expense, issue and
register replacement certificates for certificates represented to have been
lost, stolen or destroyed, upon the fulfillment of such requirements as shall be
deemed appropriate by the Issuer and by the Paying Agent, subject at all times
to provisions of law, this Supplemental Indenture governing such matters and
resolutions adopted by the Issuer with respect to lost, stolen or destroyed
securities. The Paying Agent may issue new certificates in exchange for and upon
the cancellation of mutilated certificates. Any request by the Issuer to the
Paying Agent to issue a replacement or new certificate pursuant to this section
shall be deemed to be a representation and warranty by the Issuer to the Paying
Agent that such issuance will comply with provisions of applicable law and this
Supplemental Indenture and resolutions of the Issuer.
SECTION 3.08 DISPOSITION OF CANCELED CERTIFICATES; RECORD RETENTION.
The Paying Agent shall retain certificates which have been canceled and any
accompanying documentation thereto in accordance with applicable rules and
regulations of the Commission for at least six calendar years from the date of
such cancellation. The Paying Agent, upon written request by the Issuer, shall
afford to the Issuer, its agents and counsel access at reasonable times during
normal business hours to review and make extracts or copies (at the Issuer's
sole cost and expense) of such certificates and accompanying documentation. Upon
the expiration of this six-year period, the Paying Agent, upon written request
by the Issuer, shall deliver to the Issuer the canceled certificates and any
accompanying documentation. In the event that the Commission requests that any
or all such records be furnished to it, the Paying Agent shall provide the
Issuer with prompt written notice of such request so that the Issuer may appeal
such request and the Paying Agent shall cooperate with the Issuer in any such
appeal. In the event that such appeal is unsuccessful, the Paying Agent shall be
permitted to furnish to the Commission, either at its principal office or at any
regional office, complete, correct and current hard copies of any and all
records that were requested by the Commission provided that the Paying Agent
shall exercise reasonable efforts to obtain assurance that confidential
treatment will be accorded to such records. Thereafter, such records shall not
be destroyed by the Issuer without the approval of the Paying Agent, which
approval shall not be withheld unreasonably, but will be safely stored for
possible future reference.
19
SECTION 3.09 REGISTER. The Paying Agent shall maintain the register,
which shall contain a list of the Holders, the number of Tortoise Notes held by
each Holder and the address of each Holder. The Paying Agent shall record in the
register any change of address of a Holder upon notice by such Holder. In case
of any written request or demand for the inspection of the register or any other
books of the Issuer in the possession of the Paying Agent, the Paying Agent will
notify the Issuer and secure instructions as to permitting or refusing such
inspection. The Paying Agent reserves the right, however, to exhibit the
register or other records to any person in case it is (a) ordered to do so by a
court of competent jurisdiction or a regulatory body, judicial or quasi-judicial
agency or authority having the authority to compel such disclosure or (b)
advised by its counsel that its failure to do so would be unlawful.
SECTION 3.10 RETURN OF FUNDS. Any funds paid to the Paying Agent for
the paying of interest but not applied to the payment of interest, including
interest earned on such moneys, will, to the extent permitted by law, be repaid
to the Issuer at the end of 90 days from the date on which such moneys were to
have been so applied. Upon written request, the Issuer shall be entitled to
receive from the Paying Agent, promptly after the date fixed for redemption, any
cash deposited with the Paying Agent in excess of (i) the aggregate redemption
price of the Tortoise Notes called for redemption on such date and (ii) such
other amounts, if any, to which Holders of Tortoise Notes called for redemption
may be entitled. Any funds so deposited that are unclaimed at the end of two
years from such redemption date shall, to the extent permitted by law, be paid
to the Issuer upon its written request whereupon the Issuer shall assume all
responsibility and liability for compliance with any abandoned or unclaimed
property law or regulation. Funds, while deposited with the Auction Agent, will
be held in trust for the payment of the applicable interest, redemption price
or, as may be applicable under this Supplemental Indenture, other charges.
SECTION 3.11 DATE OF EXECUTION. This Supplemental Indenture for
convenience and for the purpose of reference is dated as of _____, 2005.
SECTION 3.12 LAWS GOVERNING. It is the intent of the parties hereto
that this Supplemental Indenture shall in all respects be governed by the laws
of the State of New York. The parties agree that all actions and proceedings
arising out of this Indenture or any of the transactions contemplated hereby
shall be brought in the County of New York and, in connection with any such
action or proceeding, submit to the jurisdiction of, and venue in, such County.
Each of the parties hereto also irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim arising out of this Indenture or the
transactions contemplated hereby.
SECTION 3.13 SEVERABILITY. Of any covenant, agreement, waiver, or
part thereof in this Supplemental Indenture contained be forbidden by any
pertinent law or under any pertinent law be effective to render this
Supplemental Indenture invalid or unenforceable or to impair the lien hereof,
then each such covenant, agreement, waiver, or part thereof shall itself be and
is hereby declared to be wholly ineffective, and this Supplemental Indenture
shall be construed as if the same were not included herein.
SECTION 3.14 EXHIBITS. The terms of the Exhibits attached to this
Supplemental Indenture are incorporated herein in all particulars.
ARTICLE IV
APPLICABILITY OF INDENTURE
The provisions of the Indenture are hereby ratified, approved and
confirmed, except as otherwise expressly modified by this Supplemental
Indenture. The representations, warranties and covenants contained in the
Indenture (except as expressly modified herein) are hereby reaffirmed with the
same force and effect as if fully set forth herein and made again as of the date
hereof.
20
IN WITNESS WHEREOF, the Issuer has caused this Supplemental Indenture
to be executed in its corporate name and behalf by the Secretary, and the
Trustee, to evidence its acceptance of the trusts hereby created, has caused
this Supplemental Indenture to be executed in its corporate name and behalf, all
in multiple counterparts, each of which shall be deemed an original, and the
Issuer and the Trustee have caused this Supplemental Indenture to be dated as of
the date herein above first shown, although actually executed on the dates shown
in the acknowledgments hereafter appearing. The Issuer's Articles of
Incorporation are on file with the Secretary of State of the State of Maryland,
and said officers of the Issuer have executed this Supplemental Indenture as
officers and not individually, and the obligations and rights set forth in this
Supplemental Indenture are not binding upon any such officers, or the Board of
Directors or stockholders of the Company, individually, but are binding only
upon the assets and property of the Issuer.
TORTOISE ENERGY INFRASTRUCTURE CORPORATION
By: Xxxxx X. Xxxxxxx
Treasurer
-------------------------------------
BNY MIDWEST TRUST COMPANY, AS TRUSTEE
By: Xxxxx Xxxxxx
Assistant Vice President
-------------------------------------
21
APPENDIX A
AUCTION PROCEDURES
1. Orders.
(a) Prior to the Submission Deadline on each Auction Date for a
series of Tortoise Notes:
(i) each Beneficial Owner of Tortoise Notes of such series
may submit to its Broker-Dealer information as to:
(A) the principal amount of Outstanding Tortoise
Notes, if any, of such series held by such Beneficial Owner which such
Beneficial Owner desires to continue to hold without regard to the
Applicable Rate for Tortoise Notes of such series for the next
succeeding Rate Period of such series;
(B) the principal amount of Outstanding Tortoise
Notes, if any, of such series held by such Beneficial Owner which such
Beneficial Owner offers to sell if the Applicable Rate for Tortoise
Notes of such series for the next succeeding Rate Period of Tortoise
Notes of such series shall be less than the rate per annum specified by
such Beneficial Owner; and/or
(C) the principal amount of Outstanding Tortoise
Notes, if any, of such series held by such Beneficial Owner which such
Beneficial Owner offers to sell without regard to the Applicable Rate
for Tortoise Notes of such series for the next succeeding Rate Period
of Tortoise Notes of such series;
and
(ii) one or more Broker-Dealers, using lists of Potential
Beneficial Owners, shall in good faith for the purpose of conducting a
competitive Auction in a commercially reasonable manner, contact Potential
Beneficial Owners (by telephone or otherwise), including Persons that are not
Beneficial Owners, on such lists to determine the principal amount of Tortoise
Notes, if any, of such series which each such Potential Beneficial Owner offers
to purchase if the Applicable Rate for Tortoise Notes of such series for the
next succeeding Rate Period of Tortoise Notes of such series shall not be less
than the rate per annum specified by such Potential Beneficial Owner.
For the purposes hereof, the communication by a Beneficial Owner or
Potential Beneficial Owner to a Broker-Dealer, or by a Broker-Dealer to the
Auction Agent, of information referred to in clause (i)(A), (i)(B), (i)(C) or
(ii) of this paragraph (a) is hereinafter referred to as an "Order" and
collectively as "Orders" and each Beneficial Owner and each Potential Beneficial
Owner placing an Order with a Broker-Dealer, and such Broker-Dealer placing an
Order with the Auction Agent, is hereinafter referred to as a "Bidder" and
collectively as "Bidders"; an Order containing the information referred to in
clause (i)(A) of this paragraph (a) is hereinafter referred to as a "Hold Order"
and collectively as "Hold Orders"; an Order containing the information referred
to in clause (i)(B) or (ii) of this paragraph (a) is hereinafter referred to as
a "Bid" and collectively as "Bids"; and an Order containing the information
referred to in clause (i)(C) of this paragraph (a) is hereinafter referred to as
a "Sell Order" and collectively as "Sell Orders."
(b) (i) A Bid by a Beneficial Owner or an Existing Holder of
Tortoise Notes of a series subject to an Auction on any Auction Date shall
constitute an irrevocable offer to sell:
A-1
(A) the principal amount of Outstanding Tortoise
Notes of such series specified in such Bid if the Applicable Rate for
Tortoise Notes of such series determined on such Auction Date shall be
less than the rate specified therein;
(B) such principal amount or a lesser principal
amount of Outstanding Tortoise Notes of such series to be determined as
set forth in clause (iv) of paragraph (a) of Section 4 of this Appendix
A if the Applicable Rate for Tortoise Notes of such series determined
on such Auction Date shall be equal to the rate specified therein; or
(C) the principal amount of Outstanding Tortoise
Notes of such series specified in such Bid if the rate specified
therein shall be higher than the Maximum Rate for Tortoise Notes of
such series, or such principal amount or a lesser principal amount of
Outstanding Tortoise Notes of such series to be determined as set forth
in clause (iii) of paragraph (b) of Section 4 of this Appendix A if the
rate specified therein shall be higher than the Maximum Rate for
Tortoise Notes of such series and Sufficient Clearing Bids for Tortoise
Notes of such series do not exist.
(ii) A Sell Order by a Beneficial Owner or an Existing Holder
of Tortoise Notes of a series of Tortoise Notes subject to an Auction on any
Auction Date shall constitute an irrevocable offer to sell:
(A) the principal amount of Outstanding Tortoise
Notes of such series specified in such Sell Order; or
(B) such principal amount or a lesser principal
amount of Outstanding Tortoise Notes of such series as set forth in
clause (iii) of paragraph (b) of Section 4 of this Appendix A if
Sufficient Clearing Bids for Tortoise Notes of such series do not
exist;
PROVIDED, HOWEVER, that a Broker-Dealer that is an Existing Holder with respect
to a series of Tortoise Notes shall not be liable to any Person for failing to
sell such Tortoise Notes pursuant to a Sell Order described in the proviso to
paragraph (c) of Section 2 of this Appendix A if (1) such Tortoise Notes were
transferred by the Beneficial Owner thereof without compliance by such
Beneficial Owner or its transferee Broker-Dealer (or other transferee person, if
permitted by the Issuer) with the provisions of the Indenture or (2) such
Broker-Dealer has informed the Auction Agent pursuant to the terms of its
Broker-Dealer Agreement that, according to such Broker-Dealer's records, such
Broker-Dealer believes it is not the Existing Holder of such Tortoise Notes.
(iii) A Bid by a Potential Beneficial Owner or a Potential
Beneficial Owner of Tortoise Notes of a series subject to an Auction on any
Auction Date shall constitute an irrevocable offer to purchase:
(A) the principal amount of Outstanding Tortoise
Notes of such series specified in such Bid if the Applicable Rate for
Tortoise Notes of such series determined on such Auction Date shall be
higher than the rate specified therein; or
(B) such principal amount or a lesser principal
amount of Outstanding Tortoise Notes of such series as set forth in
clause (v) of paragraph (a) of Section 4 of this Appendix A if the
Applicable Rate for Tortoise Notes of such series determined on such
Auction Date shall be equal to the rate specified therein.
A-2
2. Submission of Orders by Broker-Dealers to Auction Agent.
(a) Each Broker-Dealer shall submit in writing to the Auction Agent
prior to the Submission Deadline on each Auction Date all Orders for Tortoise
Notes of a series subject to an Auction on such Auction Date obtained by such
Broker-Dealer, designating itself (unless otherwise permitted by the Issuer) as
an Existing Holder in respect of Tortoise Notes subject to Orders submitted or
deemed submitted to it by Beneficial Owners and as a Potential Holder in respect
of Tortoise Notes subject to Orders submitted to it by Potential Beneficial
Owners, and shall specify with respect to each such Order:
(i) the name of the Bidder placing such Order (which shall
be the Broker-Dealer unless otherwise permitted by the Issuer);
(ii) the aggregate principal amount of Tortoise Notes of such
series that are the subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder of
Tortoise Notes of such series:
(A) the principal amount of Tortoise Notes, if any,
of such series subject to any Hold Order of such Existing Holder;
(B) the principal amount of Tortoise Notes, if any,
of such series subject to any Bid of such Existing Holder and the rate
specified in such Bid; and
(C) the principal amount of Tortoise Notes, if any,
of such series subject to any Sell Order of such Existing Holder; and
(iv) to the extent such Bidder is a Potential Holder of
Tortoise Notes of such series, the rate and principal amount of Tortoise Notes
of such series specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall round such
rate up to the next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding Tortoise
Notes of a series held by any Existing Holder is not submitted to the Auction
Agent prior to the Submission Deadline, the Auction Agent shall deem a Hold
Order to have been submitted by or on behalf of such Existing Holder covering
the principal amount of Outstanding Tortoise Notes of such series held by such
Existing Holder and not subject to Orders submitted to the Auction Agent;
provided, however, that if an Order or Orders covering all of the Outstanding
Tortoise Notes of such series held by any Existing Holder is not submitted to
the Auction Agent prior to the Submission Deadline for an Auction relating to a
Special Rate Period consisting of more than 28 Rate Period Days, the Auction
Agent shall deem a Sell Order to have been submitted by or on behalf of such
Existing Holder covering the principal amount of outstanding Tortoise Notes of
such series held by such Existing Holder and not subject to Orders submitted to
the Auction Agent.
(d) If one or more Orders of an Existing Holder is submitted to the
Auction Agent covering in the aggregate more than the principal amount of
Outstanding Tortoise Notes of a series subject to an Auction held by such
Existing Holder, such Orders shall be considered valid in the following order of
priority:
A-3
(i) all Hold Orders for Tortoise Notes of such series shall
be considered valid, but only up to and including in the aggregate principal
amount of Outstanding Tortoise Notes of such series held by such Existing
Holder, and if the aggregate principal amount of Tortoise Notes of such series
subject to such Hold Orders exceeds the aggregate principal amount of
Outstanding Tortoise Notes of such series held by such Existing Holder, the
principal amount of Tortoise Notes subject to each such Hold Order shall be
reduced pro rata to cover the principal amount of Outstanding Tortoise Notes of
such series held by such Existing Holder;
(ii) (A) any Bid for Tortoise Notes of such series shall
be considered valid up to and including the excess of the principal amount of
Outstanding Tortoise Notes of such series subject to any Hold Orders referred to
in clause (i) above;
(B) subject to subclause (A), if more than one Bid
of an Existing Holder for Tortoise Notes of such series is submitted to
the Auction Agent with the same rate and the aggregate principal amount
of Outstanding Tortoise Notes of such series subject to such Bids is
greater than such excess, such Bids shall be considered valid up to and
including the amount of such excess, and the principal amount of
Tortoise Notes of such series subject to each Bid with the same rate
shall be reduced pro rata to cover the principal amount of Tortoise
Notes of such series equal to such excess;
(C) subject to subclauses (A) and (B), if more than
one Bid of an Existing Holder for Tortoise Notes of such series is
submitted to the Auction Agent with different rates, such Bids shall be
considered valid in the ascending order of their respective rates up to
and including the amount of such excess; and
(D) in any such event, the principal amount, if any,
of such Outstanding Tortoise Notes of such series subject to any
portion of Bids considered not valid in whole or in part under this
clause (ii) shall be treated as the subject of a Bid for Tortoise Notes
of such series by or on behalf of a Potential Holder at the rate
therein specified; and
(iii) all Sell Orders for Tortoise Notes of such series shall
be considered valid up to and including the excess of the principal amount of
Outstanding Tortoise Notes of such series held by such Existing Holder over the
aggregate principal amount of Tortoise Notes of such series subject to valid
Hold Orders referred to in clause (i) above and valid Bids referred to in clause
(ii) above.
(e) If more than one Bid for one or more Tortoise Note of a series
is submitted to the Auction Agent by or on behalf of any Potential Holder, each
such Bid submitted shall be a separate Bid with the rate and principal amount
therein specified.
(f) Any Order submitted by a Beneficial Owner or a Potential
Beneficial Owner to its Broker-Dealer, or by a Broker-Dealer to the Auction
Agent, prior to the Submission Deadline on any Auction Date, shall be
irrevocable.
3. Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate.
(a) Not earlier than the Submission Deadline on each Auction Date
for a series of Tortoise Notes, the Auction Agent shall assemble all valid
Orders submitted or deemed submitted to it by the Broker-Dealers in respect of
Tortoise Notes of such series (each such Order as submitted or deemed submitted
by a Broker-Dealer being hereinafter referred to individually as a "Submitted
Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be,
or as a "Submitted Order" and collectively as "Submitted Hold Orders,"
"Submitted Bids" or "Submitted Sell Orders," as the case may be, or as
"Submitted Orders") and shall determine for such series:
A-4
(i) the excess of the aggregate principal amount of
Outstanding Tortoise Notes of such series over the principal amount of
Outstanding Tortoise Notes of such series subject to Submitted Hold Orders (such
excess being hereinafter referred to as the "Available Tortoise Notes" of such
series);
(ii) from the Submitted Orders for Tortoise Notes of such
series whether:
(A) the aggregate principal amount of Outstanding
Tortoise Notes of such series subject to Submitted Bids of Potential
Holders specifying one or more rates between the Minimum Rate (for
Standard Rate Periods or less, only) and the Maximum Rate (for all Rate
Periods) for Tortoise Notes of such series;
exceeds or is equal to the sum of:
(B) the aggregate principal amount of Outstanding
Tortoise Notes of such series subject to Submitted Bids of Existing
Holders specifying one or more rates between the Minimum Rate (for
Standard Rate Periods or less, only) and the Maximum Rate (for all Rate
Periods) for Tortoise Notes of such series; and
(C) the aggregate principal amount of Outstanding
Tortoise Notes of such series subject to Submitted Sell Orders
(in the event such excess or such equality exists (other than because all of the
Outstanding Tortoise Notes of such series are subject to Submitted Hold Orders),
such Submitted Bids in subclause (A) above being hereinafter referred to
collectively as "Sufficient Clearing Bids" for Tortoise Notes of such series);
and
(iii) if Sufficient Clearing Bids for Tortoise Notes of such
series exist, the lowest rate specified in such Submitted Bids (the "Winning Bid
Rate" for Tortoise Notes of such series) which if:
(A) (I) each such Submitted Bid of Existing Holders
specifying such lowest rate and (II) all other such Submitted Bids of
Existing Holders specifying lower rates were rejected, thus entitling
such Existing Holders to continue to hold the Tortoise Notes of such
series that are subject to such Submitted Bids; and
(B) (I) each such Submitted Bid of Potential Holders
specifying such lowest rate and (II) all other such Submitted Bids of
Potential Holders specifying lower rates were accepted;
would result in such Existing Holders described in subclause (A) above
continuing to hold an aggregate principal amount of Outstanding Tortoise Notes
of such series which, when added to the aggregate principal amount of
Outstanding Tortoise Notes of such series to be purchased by such Potential
Holders described in subclause (B) above, would equal not less than the
Available Tortoise Notes of such series.
(b) Promptly after the Auction Agent has made the determinations
pursuant to paragraph (a) of this Section 3, the Auction Agent shall advise the
Issuer of the Minimum Rate and Maximum Rate for the series of Tortoise Notes for
which an Auction is being held on the Auction Date and, based on such
determination, the Applicable Rate for Tortoise Notes of such series for the
next succeeding Rate Period thereof as follows:
(i) if Sufficient Clearing Bids for Tortoise Notes of such
series exist, that the Applicable Rate for all Tortoise Notes of such series for
the next succeeding Rate Period thereof shall be equal to the Winning Bid Rate
for Tortoise Notes of such series so determined;
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(ii) if Sufficient Clearing Bids for Tortoise Notes of such
series do not exist (other than because all of the Outstanding Tortoise Notes of
such series are subject to Submitted Hold Orders), that the Applicable Rate for
all Tortoise Notes of such series for the next succeeding Rate Period thereof
shall be equal to the Maximum Rate for Tortoise Notes of such series; or
(iii) if all of the Outstanding Tortoise Notes of such series
are subject to Submitted Hold Orders, that the Applicable Rate for all Tortoise
Notes of such series for the next succeeding Rate Period thereof shall be All
Hold Rate.
4. Acceptance and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation of Tortoise Notes. Existing Holders shall continue to hold
the Tortoise Notes that are subject to Submitted Hold Orders, and, based on the
determinations made pursuant to paragraph (a) of Section 3 of this Appendix A,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected by
the Auction Agent and the Auction Agent shall take such other action as set
forth below:
(a) If Sufficient Clearing Bids for a series of Tortoise Notes have
been made, all Submitted Sell Orders with respect to Tortoise Notes of such
series shall be accepted and, subject to the provisions of paragraphs (d) and
(e) of this Section 4, Submitted Bids with respect to Tortoise Notes of such
series shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids with respect to Tortoise Notes of such
series shall be rejected:
(i) Existing Holders' Submitted Bids for Tortoise Notes of
such series specifying any rate that is higher than the Winning Bid Rate for
Tortoise Notes of such series shall be accepted, thus requiring each such
Existing Holder to sell the Tortoise Notes subject to such Submitted Bids;
(ii) Existing Holders' Submitted Bids for Tortoise Notes of
such series specifying any rate that is lower than the Winning Bid Rate for
Tortoise Notes of such series shall be rejected, thus entitling each such
Existing Holder to continue to hold the Tortoise Notes subject to such Submitted
Bids;
(iii) Potential Holders' Submitted Bids for Tortoise Notes of
such series specifying any rate that is lower than the Winning Bid Rate for
Tortoise Notes of such series shall be accepted;
(iv) each Existing Holder's Submitted Bid for Tortoise Notes
of such series specifying a rate that is equal to the Winning Bid Rate for
Tortoise Notes of such series shall be rejected, thus entitling such Existing
Holder to continue to hold the Tortoise Notes subject to such Submitted Bid,
unless the aggregate principal amount of Outstanding Tortoise Notes subject to
all such Submitted Bids shall be greater than the principal amount of Tortoise
Notes ("remaining Tortoise Notes") in the excess of the Available Tortoise Notes
of such series over the principal amount of Tortoise Notes subject to Submitted
Bids described in clauses (ii) and (iii) of this paragraph (a), in which event
such Submitted Bid of such Existing Holder shall be rejected in part, and such
Existing Holder shall be entitled to continue to hold Tortoise Notes subject to
such Submitted Bid, but only in an amount equal to the principal amount of
Tortoise Notes of such series obtained by multiplying the remaining principal
amount by a fraction, the numerator of which shall be the principal amount of
Outstanding Tortoise Notes held by such Existing Holder subject to such
Submitted Bid and the denominator of which shall be the aggregate principal
amount of Outstanding Tortoise Notes subject to such Submitted Bids made by all
such Existing Holders that specified a rate equal to the Winning Bid Rate for
Tortoise Notes of such series; and
(v) each Potential Holder's Submitted Bid for aggregate
principal amount of such series specifying a rate that is equal to the Winning
Bid Rate for aggregate principal amount of such series shall be accepted but
only in an amount equal to the principal amount of Tortoise Notes of such series
obtained by multiplying the principal amount of Tortoise Notes in the excess of
the Available Tortoise Notes of such series over the principal amount of
Tortoise Notes subject to Submitted Bids described in
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clauses (ii) through (iv) of this paragraph (a) by a fraction, the numerator of
which shall be the principal amount of Outstanding Tortoise Notes subject to
such Submitted Bid and the denominator of which shall be the aggregate principal
amount of Outstanding Tortoise Notes subject to such Submitted Bids made by all
such Potential Holders that specified a rate equal to the Winning Bid Rate for
Tortoise Notes of such series.
(b) If Sufficient Clearing Bids for a series of Tortoise Notes have
not been made (other than because all of the Outstanding Tortoise Notes of such
series are subject to Submitted Hold Orders), subject to the provisions of
paragraph (d) of this Section 4, Submitted Orders for Tortoise Notes of such
series shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids for Tortoise Notes of such series shall be
rejected:
(i) Existing Holders' Submitted Bids for Tortoise Notes of
such series specifying any rate that is equal to or lower than the Maximum Rate
for Tortoise Notes of such series shall be rejected, thus entitling such
Existing Holders to continue to hold the Tortoise Notes subject to such
Submitted Bids;
(ii) Potential Holders' Submitted Bids for Tortoise Notes of
such series specifying any rate that is equal to or lower than the Maximum Rate
for Tortoise Notes of such series shall be accepted; and
(iii) Each Existing Holder's Submitted Bid for Tortoise Notes
of such series specifying any rate that is higher than the Maximum Rate for
Tortoise Notes of such series and the Submitted Sell Orders for Tortoise Notes
of such series of each Existing Holder shall be accepted, thus entitling each
Existing Holder that submitted or on whose behalf was submitted any such
Submitted Bid or Submitted Sell Order to sell the Tortoise Notes of such series
subject to such Submitted Bid or Submitted Sell Order, but in both cases only in
an amount equal to the principal amount of Tortoise Notes of such series
obtained by multiplying the principal amount of Tortoise Notes of such series
subject to Submitted Bids described in clause (ii) of this paragraph (b) by a
fraction, the numerator of which shall be the principal amount of Outstanding
Tortoise Notes of such series held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and the denominator of which shall be the
aggregate principal amount of Outstanding Tortoise Notes of such series subject
to all such Submitted Bids and Submitted Sell Orders.
(c) If all of the Outstanding Tortoise Notes of a series are subject
to Submitted Hold Orders, all Submitted Bids for Tortoise Notes of such series
shall be rejected.
(d) If, as a result of the procedures described in clause (iv) or
(v) of paragraph (a) or clause (iii) of paragraph (b) of this Section 4, any
Existing Holder would be entitled or required to sell, or any Potential Holder
would be entitled or required to purchase, less than an Authorized Denomination
of Tortoise Notes on any Auction Date, the Auction Agent shall, in such manner
as it shall determine in its sole discretion, round up or down the principal
amount of Tortoise Notes of such series to be purchased or sold by any Existing
Holder or Potential Holder on such Auction Date as a result of such procedures
so that the principal amount of Tortoise Notes so purchased or sold by each
Existing Holder or Potential Holder on such Auction Date shall be equal to an
Authorized Denomination.
(e) If, as a result of the procedures described in clause (v) of
paragraph (a) of this Section 4, any Potential Holder would be entitled or
required to purchase less than an Authorized Denomination of Tortoise Notes on
any Auction Date, the Auction Agent shall, in such manner as it shall determine
in its sole discretion, allocate Tortoise Notes of such series or purchase among
Potential Holders so that only Tortoise Notes of such series in Authorized
Denominations are purchased on such Auction Date as a
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result of such procedures by any Potential Holder, even if such allocation
results in one or more Potential Holders not purchasing Tortoise Notes of such
series on such Auction Date.
(f) Based on the results of each Auction for a series of Tortoise
Notes, the Auction Agent shall determine the aggregate principal amount of
Tortoise Notes of such series to be purchased and the aggregate principal amount
of Tortoise Notes of such series to be sold by Potential Holders and Existing
Holders and, with respect to each Potential Holder and Existing Holder, to the
extent that such aggregate principal amount of Tortoise Notes and such aggregate
principal amount of Tortoise Notes to be sold differ, determine to which other
Potential Holder(s) or Existing Holder(s) they shall deliver, or from which
other Potential Holder(s) or Existing Holder(s) they shall receive, as the case
may be, Tortoise Notes of such series. Notwithstanding any provision of the
Auction Procedures or the Settlement Procedures to the contrary, in the event an
Existing Holder or Beneficial Owner of Tortoise Notes of a series with respect
to whom a Broker-Dealer submitted a Bid to the Auction Agent for such Tortoise
Notes that was accepted in whole or in part, or submitted or is deemed to have
submitted a Sell Order for such Tortoise Notes that was accepted in whole or in
part, fails to instruct its Agent Member to deliver such Tortoise Notes against
payment therefor, partial deliveries of Tortoise Notes that have been made in
respect of Potential Holders' or Potential Beneficial Owners' Submitted Bids for
Tortoise Notes of such series that have been accepted in whole or in part shall
constitute good delivery to such Potential Holders and Potential Beneficial
Owners.
(g) Neither the Issuer nor the Auction Agent nor any affiliate of
either shall have any responsibility or liability with respect to the failure of
an Existing Holder, or a Potential Holder to deliver Tortoise Notes of any
series or to pay for Tortoise Notes of any series sold or purchased pursuant to
the Auction Procedures or otherwise.
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FORM OF NOTE
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APPENDIX C
FORM OF TRUSTEE AUTHENTICATION CERTIFICATE
C-1
