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..............................................7
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.................................14
Section 2.05 Restrictions on Transfer...................................15
Section 2.06 1940 Act Tortoise Notes Asset Coverage.....................15
Section 2.07 Tortoise Notes Basic Maintenance Amount....................15
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.......................17
ARTICLE III GENERAL PROVISIONS...............................................17
Section 3.01 Trustee as Paying Agent....................................17
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..........................................18
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...................................................19
Section 3.10 Return of Funds............................................19
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 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
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 commercial paper of issuers
of the sort described above, in substitution therefor, a nationally recognized
dealer in 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 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 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.
"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 28 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.
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"1940 ACT TORTOISE NOTES ASSET COVERAGE" means asset coverage, as
determined in accordance with Section 18(h) of the 1940 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 1940 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.
"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.
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"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 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 28 days.
"STATED MATURITY" with respect to Tortoise Notes Series C, shall mean
________, ____.
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"SUBMISSION DEADLINE" means 1:00 p.m. (11:00 a.m. in the case of a
daily Auction Rate), 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.
"SUBMISSION PROCESSING DEADLINE" shall mean the earlier of (i) forty
(40) minutes after the Submission Deadline and (ii) the time when the Auction
Agent begins to disseminate the results of the Auction to the Broker-Dealers.
"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.
"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
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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. 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
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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.
(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
9
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 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.
10
(a) (i) After the initial Rate Period, subject to the provisions of
this Section 2.03 and to the extent permitted under the 1940 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 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
11
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 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 1940
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.
12
(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 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
13
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 1940 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 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.
14
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.
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
15
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:
(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
16
Maintenance Amount or to meet the 1940 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.
(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.
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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 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.
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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.
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
19
to trial by jury in any action, proceeding or counterclaim arising out of this
Indenture or the transactions contemplated hereby.
SECTION 3.13 SEVERABILITY. If 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.
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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
--------------------------------
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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:
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(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.
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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 or prior to the Submission Processing Deadline
(if certain conditions are satisfied) 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 or Submission Processing Deadline, as the
case may be, 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 or Submission Processing Deadline, as the case may be, 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 Processing 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;
A-5
(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 the 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
