EXHIBIT D.3
SUPPLEMENTAL INDENTURE OF TRUST
by and between
TORTOISE ENERGY INFRASTRUCTURE CORPORATION,
as Issuer
and
BNY MIDWEST TRUST COMPANY N.A.,
as Trustee
Authorizing the Issuance of
$[______________]
Auction Rate Senior Notes
Series [____]
Series [____]
Dated as of June [___], 2004
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 Auction Agent.........................................................17
Section 3.02 Trustee as Paying Agent..........................................................18
Section 3.03 Date of Execution................................................................18
Section 3.04 Laws Governing...................................................................18
Section 3.05 Severability.....................................................................18
Section 3.06 Exhibits.........................................................................18
ARTICLE IV Applicability of Indenture....................................................................18
APPENDIX A AUCTION PROCEDURES
APPENDIX B FORM OF NOTES
APPENDIX C FORM OF TRUSTEE AUTHENTICATION CERTIFICATE
SUPPLEMENTAL INDENTURE OF TRUST
THIS SUPPLEMENTAL INDENTURE OF TRUST (this "Supplemental Indenture")
dated as of June [__], 2004, is by and between TORTOISE ENERGY INFRASTRUCTURE
CORPORATION, a Maryland corporation (the "Issuer") and BNY MIDWEST TRUST COMPANY
N.A., a national banking association duly organized and operating under the laws
of the United States of America (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 June [__], 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
[_________] (the "Series [__] Tortoise Notes") and $[_________] of its auction
rate senior notes, Series [_____] (the "Series [______] Tortoise Notes" and,
together with the Series [__] Tortoise Notes, 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., ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇ 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 No Auction 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.
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"BID" shall have the meaning specified in Appendix A hereto.
"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
▇▇▇▇▇'▇ 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.
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"FITCH" means Fitch Ratings and its successors at law.
"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 ▇▇▇▇▇'▇ 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.
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"MOODY'S GUIDELINES" mean the guidelines provided by Moody's,
as may be amended from time to time, in connection with Moody's ratings of
Tortoise Notes.
"1940 ACT TORTOISE NOTES ASSET COVERAGE" means asset
coverage, as determined in accordance with Section 18(h) of the 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 __ and
Series __ Tortoise Notes, ______, 2004.
"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 __________________ 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.
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"PERSON" or "PERSON" means and includes an individual, a
partnership, a trust, a company, an unincorporated association, a joint venture
or other entity or a government or any agency or political subdivision thereof.
"POTENTIAL BENEFICIAL OWNER," with respect to a series of
Tortoise Notes, shall mean a customer of a Broker-Dealer that is not a
Beneficial Owner of Tortoise Notes of such series but that wishes to purchase
Tortoise Notes of such series, or that is a Beneficial Owner of Tortoise Notes
of such series that wishes to purchase additional Tortoise Notes of such series.
"POTENTIAL HOLDER," with respect to Tortoise Notes of such
series, shall mean a Broker-Dealer (or any such other person as may be permitted
by the Company) that is not an Existing Holder of Tortoise Notes of such series
or that is an Existing Holder of Tortoise Notes of such series that wishes to
become the Existing Holder of additional Tortoise Notes of such series.
"RATE PERIOD" means, with respect to a Series of Tortoise
Notes, the period commencing on the Original Issue Date thereof and ending on
the date specified for such series on the Original Issue 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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 __ and Series
__.
"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 accumulated 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.
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"STANDARD RATE PERIOD" means a Rate Period of 28 days.
"STATED MATURITY" with respect to Tortoise Notes Series __ and
Series ___, shall mean ___________, 2044 and __________, 2044, respectively.
"SUBMISSION DEADLINE" means 1:00 p.m., Eastern Standard time,
on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Auction Agent as specified
by the Auction Agent from time to time.
"SUBMITTED BID" shall have the meaning specified in Appendix A
hereto.
"SUBMITTED HOLD ORDER" shall have the meaning specified in
Appendix A hereto.
"SUBMITTED ORDER" shall have the meaning specified in Appendix
A hereto.
"SUBMITTED SELL ORDER" shall have the meaning specified in
Appendix A hereto.
"SUFFICIENT CLEARING BIDS" shall have the meaning specified in
Appendix A hereto.
"TORTOISE NOTES BASIC MAINTENANCE AMOUNT" as of any Valuation
Date has the meaning set forth in the Rating Agency Guidelines.
"TORTOISE NOTES SERIES __ AND SERIES __" means the Series __
and Series __of the Tortoise Notes or any other Notes hereinafter designated as
Series __ and Series __ of the 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 N.A. 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 __ and Series __ 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 __: A series of Notes having an aggregate
principal amount of $__________ , is designated "Series __
Tortoise Notes" ("Tortoise Notes Series __"). The principal
amount of the Tortoise Notes Series __ shall be due and
payable at the Stated Maturity. The initial Rate Period for
Tortoise Notes Series __ shall be the period from and
including the Original Issue Date thereof to but excluding
___________, 2004. The Tortoise Notes Series __ shall have an
Applicable Rate for the initial Rate Period equal to __% per
annum and an initial Interest Payment Date of _________, 200_
. 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
__ shall have such other terms and conditions as are set forth
herein. The Tortoise Notes Series __ shall constitute a
separate series of Notes of the Issuer.
(ii) Series __: A series of Notes having an aggregate
principal amount of $__________ , is designated "Series __
Tortoise Notes" ("Tortoise Notes Series __"). The principal
amount of the Tortoise Notes Series __ shall be due and
payable at the Stated Maturity. The initial Rate Period for
Tortoise Notes Series __ shall be the period from and
including the Original Issue Date thereof to but excluding
___________, 2004. The Tortoise Notes Series __ shall have an
Applicable Rate for the initial Rate Period equal to __% per
annum and an initial Interest Payment Date of _________, 200_
. 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
__ shall have such other terms and conditions as are set forth
herein. The Tortoise Notes Series __ 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
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may be hereafter amended or supplemented by any supplemental indenture
thereto pursuant to the applicable provisions thereof) insofar as the
Indenture shall be applicable.
(d) Except as otherwise provided in this Section, the Tortoise
Notes in the form of one global note for each series shall be
registered in the name of the Securities Depository or its nominee and
ownership thereof shall be maintained in book-entry form by the
Securities Depository for the account of the Agent Members. Initially,
each global note shall be registered in the name of Cede & Co., as the
nominee of The Depository Trust Company. The global notes may be
transferred, in whole but not in part, only to the Securities
Depository or a nominee of the Securities Depository or to a successor
Securities Depository selected or approved by the Issuer or to a
nominee of such successor Securities Depository. Each global note shall
bear a legend substantially to the following effect: "Except as
otherwise provided in the Indenture, this global note may be
transferred, in whole but not in part, only to another nominee of the
Securities Depository (as defined in the Indenture) or to a successor
Securities Depository or to a nominee of a successor Securities
Depository."
SECTION 2.02 INTEREST.
(a) The Holders of any Series of Tortoise Notes will bear
interest on their Tortoise Notes at the Applicable Rate, determined as
set forth in paragraph (c) of this Section 2.02, and no more, payable
on the respective dates determined as set forth in paragraph (b) of
this Section 2.02. Interest on the Outstanding Tortoise Notes of any
series issued on the Original Issue Date shall accrue from the Original
Issue Date.
(b) (i) Interest shall be payable, subject to subparagraph
(b)(ii) of this Section 2.02, on each Series of Tortoise Notes, with
respect to any Rate Period on the first Business Day following the last
day of such Rate Period; provided, however, if the Rate Period is
greater than 30 days then on a monthly basis on the first Business Day
of each month within such Rate Period 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 (A) 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
[___]" or "Series [___]" or (B) the Interest Payment Date
shall be the first Business Day that falls prior to such day
for payment of interest in the case of a Series of Tortoise
Notes designated as "Series [___]" or "Series [___]."
(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
9
ledger or security records of the Issuer on the Business Day
next preceding such Interest Payment Date. Interest in arrears
for any past Rate Period may be paid at any time, without
reference to any regular Interest Payment Date, to the Holders
as their names appear on the books or records of the Issuer on
such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors. No
interest will be payable in respect of any Interest Payment or
payments which may be in arrears.
(c) (i) The interest rate on Outstanding Tortoise Notes of
each Series during the period from and after the Original Issue Date to
and including the last day of the initial Rate Period therefor shall be
equal to the rate per annum set forth under Section 2.01(a) above. For
each subsequent Rate Period with respect to the Tortoise Notes
Outstanding thereafter, the interest rate shall be equal to the rate
per annum that results from an Auction; provided, however, that if an
Auction for any subsequent Rate Period of a Series of Tortoise Notes is
not held for any reason or if Sufficient Clearing Bids have not been
made in an Auction (other than as a result of all Series of Tortoise
Notes being the subject of Submitted Hold Orders), then the interest
rate on a Series of Tortoise Notes for any such Rate Period shall be
the Maximum Rate (except (i) during a Default Period when the interest
rate shall be the Default Rate, as set forth in Section 2.02(c)(ii)
below) or (ii) after a Default Period and prior to the beginning of the
next Rate Period when the interest rate shall be the No Auction Rate at
the close of business on the last day of such Default Period). 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 an 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).
10
(iv) The amount of interest per Tortoise Note payable
on each Interest Payment Date of each Rate Period of less than
one (1) year (or in respect of interest on another date in
connection with a redemption during such Rate Period) shall be
computed by multiplying the Applicable Rate (or the Default
Rate) for such Rate Period (or a portion thereof) by a
fraction, the numerator of which will be the number of days in
such Rate Period (or portion thereof) that such Tortoise Notes
were outstanding and for which the Applicable Rate or the
Default Rate was applicable and the denominator of which will
be 360, multiplying the amount so obtained by $25,000, and
rounding the amount so obtained to the nearest cent. During
any Rate Period of one (1) year or more, the amount of
interest per Tortoise Note payable on any Interest Payment
Date (or in respect of interest on another date in connection
with a redemption during such Rate Period) shall be computed
as described in the preceding sentence.
(d) Any Interest Payment made on any Series of Tortoise Notes
shall first be credited against the earliest accrued but unpaid
interest due with respect to such Series.
SECTION 2.03 REDEMPTION.
(a) (i) After the initial Rate Period, subject to the
provisions of this Section 2.03 and to the extent permitted under the
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
11
Tortoise Notes will be subject to mandatory redemption out of
funds legally available therefor. The aggregate principal
amount of Tortoise Notes to be redeemed in such circumstances
will be equal to the lesser of (A) the minimum principal
amount of Tortoise Notes the redemption of which, if deemed to
have occurred immediately prior to the opening of business on
the relevant Asset Coverage Cure Date, would result in the
Issuer having Eligible Assets with an aggregate Discounted
Value at least equal to the Tortoise Notes Basic Maintenance
Amount, or sufficient to satisfy 1940 Act Tortoise Notes Asset
Coverage, as the case may be, in either case as of the
relevant Asset Coverage Cure Date (provided that, if there is
no such minimum principal amount of Tortoise Notes the
redemption of which would have such result, all Tortoise Notes
then Outstanding will be redeemed), and (B) the maximum
principal amount of Tortoise Notes that can be redeemed out of
funds expected to be available therefor on the Mandatory
Redemption Date at the Mandatory Redemption Price set forth in
subparagraph (a)(iii) of this Section 2.03.
(iii) In determining the Tortoise Notes required to
be redeemed in accordance with the foregoing Section
2.03(a)(ii), the Issuer shall allocate the aggregate principal
amount of Tortoise Notes required to be redeemed to satisfy
the Tortoise Notes Basic Maintenance Amount or the 1940 Act
Tortoise Notes Asset Coverage, as the case may be, pro rata
among the Holders of Tortoise Notes in proportion to the
aggregate principal amount of Tortoise Notes they hold, by lot
or by such other method as the Issuer shall deem equitable,
subject to the further provisions of this subparagraph (iii).
The Issuer shall effect any required mandatory redemption
pursuant to subparagraph (a)(ii) of this Section 2.03 no later
than 40 days after the Asset Coverage Cure Date (the
"Mandatory Redemption Date"), except that if the Issuer does
not have funds legally available for the redemption of, or is
not otherwise legally permitted to redeem, the aggregate
principal amount of Tortoise Notes which would be required to
be redeemed by the Issuer under clause (A) of subparagraph
(a)(ii) of this Section 2.03 if sufficient funds were
available, or the Issuer otherwise is unable to effect such
redemption on or prior to such Mandatory Redemption Date, the
Issuer shall redeem those Tortoise Notes, and other Notes, on
the earliest practicable date on which the Issuer will have
such funds available, upon notice pursuant to Section 2.03(b)
to record owners of the Tortoise Notes to be redeemed and the
Paying Agent. The Issuer will deposit with the Paying Agent
funds sufficient to redeem the specified aggregate principal
amount of Tortoise Notes with respect to a redemption required
under subparagraph (a)(ii) of this Section 2.03, by 1:00 p.m.,
New York City time, of the Business Day immediately preceding
the Mandatory Redemption Date. If fewer than all of the
Outstanding Tortoise Notes are to be 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 Note 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
12
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),
(iv) that interest on the Tortoise Notes to be redeemed will cease to
accrue on such date fixed for redemption, and (v) the provision under
which redemption shall be made. No defect in the Notice of Redemption
or in the transmittal or mailing thereof will affect the validity of
the redemption proceedings, except as required by applicable law. If
fewer than all Tortoise Notes held by any Holder are to be redeemed,
the Notice of Redemption mailed to such Holder shall also specify the
principal amount of Tortoise Notes to be redeemed from such Holder.
(c) Notwithstanding the provisions of paragraph (a) of this
Section 2.03, no Tortoise Notes may be redeemed unless all interest on
the Outstanding Tortoise Notes and all Notes of the Issuer ranking on a
parity with the Tortoise Notes, have been or are being
contemporaneously paid or set aside for payment; provided, however,
that the foregoing shall not prevent the purchase or acquisition of all
Outstanding Tortoise Notes pursuant to the successful completion of an
otherwise lawful purchase or exchange offer made on the same terms to,
and accepted by, Holders of all Outstanding Tortoise Notes.
(d) Upon the deposit of funds sufficient to redeem any
Tortoise Notes with the Paying Agent and the giving of the Notice of
Redemption to the Trustee under paragraph (b) of this Section 2.03,
interest on such Tortoise Notes shall cease to accrue and such Tortoise
Notes shall no longer be deemed to be Outstanding for any purpose
(including, without limitation, for purposes of calculating whether the
Issuer has maintained the requisite Tortoise Notes Basic Maintenance
Amount or the 1940 Act Tortoise Notes Asset Coverage), and all rights
of the holder of the Tortoise Notes so called for redemption shall
cease and terminate, except the right of such holder to receive the
redemption price specified herein, but without any interest or other
additional amount. Such redemption price shall be paid 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
13
Notice of Redemption has been given, interest may be paid on a Series
of Tortoise Notes and shall include those Tortoise Notes for which
Notice of Redemption has been given but for which deposit of funds has
not been made.
(f) All moneys paid to the Paying Agent for payment of the
redemption price of any Tortoise Notes called for redemption shall be
held in trust by the Paying Agent for the benefit of holders of
Tortoise Notes to be redeemed.
(g) So long as any Tortoise Notes are held of record by the
nominee of the Securities Depository, the redemption price for such
Tortoise Notes will be paid on the date fixed for redemption to the
nominee of the Securities Depository for distribution to Agent Members
for distribution to the persons for whom they are acting as agent.
(h) Except for the provisions described above, nothing
contained herein limits any right of the Issuer to purchase or
otherwise acquire any Tortoise Notes outside of an Auction at any
price, whether higher or lower than the price that would be paid in
connection with an optional or mandatory redemption, so long as, at the
time of any such purchase, there is no arrearage in the payment of
interest on, or the mandatory or optional redemption price with respect
to, any series of Tortoise Notes for which Notice of Redemption has
been given and the Issuer is in compliance with the 1940 Act Tortoise
Notes Asset Coverage and has Eligible Assets with an aggregate
Discounted Value at least equal to the Tortoise Notes Basic Maintenance
Amount after giving effect to such purchase or acquisition on the date
thereof. If fewer than all the Outstanding Tortoise Notes of any series
are redeemed or otherwise acquired by the Issuer, the Issuer shall give
notice of such transaction to the Trustee, in accordance with the
procedures agreed upon by the Board of Directors.
(i) The Board of Directors may, without further consent of the
holders of the Tortoise Notes or the holders of shares of capital stock
of the Issuer, authorize, create or issue any class or series of Notes,
including other series of Tortoise Notes, ranking prior to or on a
parity with the Tortoise Notes to the extent permitted by the 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
14
Broker-Dealers and has provided notice of such designation and
otherwise complied with the Rating Agency Guidelines.
(b) If the Issuer proposes to designate any Special Rate
Period, not fewer than 7 (or two Business Days in the event the
duration of the Rate Period prior to such Special Rate Period is fewer
than 8 days) nor more than 30 Business Days prior to the first day of
such Special Rate Period, notice shall be (i) made by press release and
(ii) communicated by the Issuer by telephonic or other means to the
Trustee and confirmed in writing promptly thereafter. Each such notice
shall state (A) that the Issuer proposes to exercise its option to
designate a succeeding Special Rate Period, specifying the first and
last days thereof and (B) that the Issuer will by 3:00 p.m., New York
City time, on the second Business Day next preceding the first day of
such Special Rate Period, notify the Auction Agent and the Trustee, who
will promptly notify the Broker-Dealers, of either (x) its
determination, subject to certain conditions, to proceed with such
Special Rate Period, subject to the terms of any Specific Redemption
Provisions, or (y) its determination not to proceed with such Special
Rate Period, in which latter event the succeeding Rate Period shall be
a Standard Rate Period.
No later than 3:00 p.m., New York City time, on the second Business Day
next preceding the first day of any proposed Special Rate Period, the Issuer
shall deliver to the Auction Agent and Trustee, who will promptly deliver to the
Broker-Dealers and Existing Holders, either:
(i) a notice stating (A) that the Issuer has
determined to designate the next succeeding Rate Period as a
Special Rate Period, specifying the first and last days
thereof and (B) the terms of any Specific Redemption
Provisions; or
(ii) a notice stating that the Issuer has determined
not to exercise its option to designate a Special Rate Period.
If the Issuer fails to deliver either such notice with respect to any
designation of any proposed Special Rate Period to the Auction Agent or is
unable to make the confirmation provided in clause (v) of Paragraph (a) of this
Section 2.04 by 3:00 p.m., New York City time, on the second Business Day next
preceding the first day of such proposed Special Rate Period, the Issuer shall
be deemed to have delivered a notice to the Auction Agent with respect to such
Rate Period to the effect set forth in clause (ii) above, thereby resulting in a
Standard Rate Period.
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.
15
SECTION 2.07 TORTOISE NOTES BASIC MAINTENANCE AMOUNT. So long as the
Tortoise Notes are Outstanding and any Rating Agency is then rating the Tortoise
Notes, the Issuer shall maintain, as of each Valuation Date, Eligible Assets
having an aggregate Discounted Value equal to or greater than the Tortoise Notes
Basic Maintenance Amount; provided, however, that Section 2.03(a)(ii) shall be
the sole remedy in the event the Issuer fails to do so.
SECTION 2.08 CERTAIN OTHER RESTRICTIONS.
(a) For so long as any Tortoise Notes are Outstanding and any
Rating Agency is then rating the Tortoise Notes, the Issuer will not
engage in certain proscribed transactions set forth in the Rating
Agency Guidelines, unless it has received written confirmation from
each such Rating Agency that proscribes the applicable transaction in
its Rating Agency Guidelines that any such action would not impair the
rating then assigned by such Rating Agency to a Series of Tortoise
Notes.
(b) For so long as any Tortoise Notes are Outstanding, the
Issuer will not declare, pay or set apart for payment any dividend or
other distribution (other than a dividend or distribution paid in
shares of, or options, warrants or rights to subscribe for or purchase,
common shares or other shares of capital stock of the Issuer) upon any
class of shares of capital stock of the Issuer, unless, in every such
case, immediately after such transaction, the 1940 Act Tortoise Notes
Asset Coverage would be achieved after deducting the amount of such
dividend, distribution, or purchase price, as the case may be;
provided, however, that dividends may be declared upon any preferred
shares of capital stock of the Issuer if the Tortoise Notes and any
other senior securities representing indebtedness of the Issuer have an
asset coverage of at least 200% at the time of declaration thereof,
after deducting the amount of such dividend.
(c) A declaration of a dividend or other distribution on or
purchase or redemption of any common or preferred shares of capital
stock of the Issuer is prohibited (i) at any time that an Event of
Default under the Indenture has occurred and is continuing, (ii) if
after giving effect to such declaration, the Issuer would not have
Eligible Assets with an aggregate Discounted Value at least equal to
the Tortoise Notes Basic Maintenance Amount or the 1940 Act Tortoise
Notes Asset Coverage, or (iii) the Issuer has not redeemed the full
amount of Tortoise Notes required to be redeemed by any provisions for
mandatory redemption contained herein.
SECTION 2.09 COMPLIANCE PROCEDURES FOR ASSET MAINTENANCE TESTS. For so
long as any Tortoise Notes are Outstanding and any Rating Agency is then rating
such Tortoise Notes:
(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.
16
(c) Compliance with the Tortoise Notes Basic Maintenance
Amount and 1940 Act Tortoise Notes Asset Coverage tests shall be
determined with reference to those Tortoise Notes which are deemed to
be Outstanding hereunder.
(d) The Issuer shall deliver to each Rating Agency which is
then rating Tortoise Notes and any other party specified in the Rating
Agency Guidelines all certificates that are set forth in the respective
Rating Agency Guidelines regarding 1940 Act Tortoise Notes Asset
Coverage, Tortoise Notes Basic Maintenance Amount and/or related
calculations at such times and containing such information as set forth
in the respective Rating Agency Guidelines (each, a "Rating Agency
Certificate").
(e) In the event that any Rating Agency Certificate is not
delivered within the time periods set forth in the Rating Agency
Guidelines, the Issuer shall be deemed to have failed to maintain the
Tortoise Notes Basic Maintenance Amount or the 1940 Act Tortoise Notes
Asset Coverage, as the case may be, on such Valuation Date for purposes
of Section 2.09(b). In the event that any Rating Agency Certificate
with respect to an applicable Asset Coverage Cure Date is not delivered
within the time periods set forth in the Rating Agency Guidelines, the
Issuer shall be deemed to have failed to have Eligible Assets with an
aggregate Discounted Value at least equal to the Tortoise Notes Basic
Maintenance Amount or to meet the 1940 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 303 and 903 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.
17
ARTICLE III
GENERAL PROVISIONS
SECTION 3.01 TRUSTEE AS AUCTION AGENT. The Trustee shall serve as
Auction Agent 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 serve as Auction Agent.
SECTION 3.02 TRUSTEE AS PAYING AGENT. The Trustee shall serve as Paying
Agent 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.
SECTION 3.03 DATE OF EXECUTION. This Supplemental Indenture for
convenience and for the purpose of reference is dated as of June [__], 2004.
SECTION 3.04 LAWS GOVERNING. It is the intent of the parties hereto
that this Supplemental Indenture shall in all respects be governed by the laws
of the State of New York. The parties agree that all actions and proceedings
arising out of this Indenture or any of the transactions contemplated hereby
shall be brought in the County of New York and, in connection with any such
action or proceeding, submit to the jurisdiction of, and venue in, such County.
Each of the parties hereto also irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim arising out of this Indenture or the
transactions contemplated hereby.
SECTION 3.05 SEVERABILITY. Of any covenant, agreement, waiver, or part
thereof in this Supplemental Indenture contained be forbidden by any pertinent
law or under any pertinent law be effective to render this Supplemental
Indenture invalid or unenforceable or to impair the lien hereof, then each such
covenant, agreement, waiver, or part thereof shall itself be and is hereby
declared to be wholly ineffective, and this Supplemental Indenture shall be
construed as if the same were not included herein.
SECTION 3.06 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.
18
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 is 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 shareholders of the Fund, individually, but are binding only upon
the assets and property of the Issuer.
TORTOISE ENERGY INFRASTRUCTURE
CORPORATION
By:_________________________________
[_____________]
_________________________________
BNY MIDWEST TRUST COMPANY N.A.,
AS TRUSTEE
By:_________________________________
[_____________]
_________________________________
19
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 on each Auction Date all Orders for Tortoise
Notes of a series subject to an Auction on such Auction Date obtained by such
Broker-Dealer, designating itself (unless otherwise permitted by the Issuer) as
an Existing Holder in respect of Tortoise Notes subject to Orders submitted or
deemed submitted to it by Beneficial Owners and as a Potential Holder in respect
of Tortoise Notes subject to Orders submitted to it by Potential Beneficial
Owners, and shall specify with respect to each such Order:
(i) the name of the Bidder placing such Order (which shall be
the Broker-Dealer unless otherwise permitted by the Issuer);
(ii) the aggregate principal amount of Tortoise Notes of such
series that are the subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder of
Tortoise Notes of such series:
(A) the principal amount of Tortoise Notes, if any,
of such series subject to any Hold Order of such Existing
Holder;
(B) the principal amount of Tortoise Notes, if any,
of such series subject to any Bid of such Existing Holder and
the rate specified in such Bid; and
(C) the principal amount of Tortoise Notes, if any,
of such series subject to any Sell Order of such Existing
Holder; and
(iv) to the extent such Bidder is a Potential Holder of
Tortoise Notes of such series, the rate and principal amount of
Tortoise Notes of such series specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures
to the right of the decimal point, the Auction Agent shall round such rate up to
the next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding Tortoise
Notes of a series held by any Existing Holder is not submitted to the Auction
Agent prior to the Submission Deadline, the Auction Agent shall deem a Hold
Order to have been submitted by or on behalf of such Existing Holder covering
the principal amount of Outstanding Tortoise Notes of such series held by such
Existing Holder and not subject to Orders submitted to the Auction Agent;
provided, however, that if an Order or Orders covering all of the Outstanding
Tortoise Notes of such series held by any Existing Holder is not submitted to
the Auction Agent prior to the Submission Deadline for an Auction relating to a
Special Rate Period consisting of more than 28 Rate Period Days, the Auction
Agent shall deem a Sell Order to have been submitted by or on behalf of such
Existing Holder covering the principal amount of outstanding Tortoise Notes of
such series held by such Existing Holder and not subject to Orders submitted to
the Auction Agent.
(d) If one or more Orders of an Existing Holder is submitted to the
Auction Agent covering in the aggregate more than the principal amount of
Outstanding Tortoise Notes of a series subject to an Auction held by such
Existing Holder, such Orders shall be considered valid in the following order of
priority:
A-3
(i) all Hold Orders for Tortoise Notes of such series shall be
considered valid, but only up to and including in the aggregate
principal amount of Outstanding Tortoise Notes of such series held by
such Existing Holder, and if the aggregate principal amount of Tortoise
Notes of such series subject to such Hold Orders exceeds the aggregate
principal amount of Outstanding Tortoise Notes of such series held by
such Existing Holder, the principal amount of Tortoise Notes subject to
each such Hold Order shall be reduced pro rata to cover the principal
amount of Outstanding Tortoise Notes of such series held by such
Existing Holder;
(ii) (A) any Bid for Tortoise Notes of such series shall be
considered valid up to and including the excess of the principal amount
of Outstanding Tortoise Notes of such series subject to any Hold Orders
referred to in clause (i) above;
(B) subject to subclause (A), if more than one Bid of
an Existing Holder for Tortoise Notes of such series is
submitted to the Auction Agent with the same rate and the
aggregate principal amount of Outstanding Tortoise Notes of
such series subject to such Bids is greater than such excess,
such Bids shall be considered valid up to and including the
amount of such excess, and the principal amount of Tortoise
Notes of such series subject to each Bid with the same rate
shall be reduced pro rata to cover the principal amount of
Tortoise Notes of such series equal to such excess;
(C) subject to subclauses (A) and (B), if more than
one Bid of an Existing Holder for Tortoise Notes of such
series is submitted to the Auction Agent with different rates,
such Bids shall be considered valid in the ascending order of
their respective rates up to and including the amount of such
excess; and
(D) in any such event, the principal amount, if any,
of such Outstanding Tortoise Notes of such series subject to
any portion of Bids considered not valid in whole or in part
under this clause (ii) shall be treated as the subject of a
Bid for Tortoise Notes of such series by or on behalf of a
Potential Holder at the rate therein specified; and
(iii) all Sell Orders for Tortoise Notes of such series shall
be considered valid up to and including the excess of the principal
amount of Outstanding Tortoise Notes of such series held by such
Existing Holder over the aggregate principal amount of Tortoise Notes
of such series subject to valid Hold Orders referred to in clause (i)
above and valid Bids referred to in clause (ii) above.
(e) If more than one Bid for one or more Tortoise Note of a series is
submitted to the Auction Agent by or on behalf of any Potential Holder, each
such Bid submitted shall be a separate Bid with the rate and principal amount
therein specified.
(f) Any Order submitted by a Beneficial Owner or a Potential Beneficial
Owner to its Broker-Dealer, or by a Broker-Dealer to the Auction Agent, prior to
the Submission Deadline on any Auction Date, shall be irrevocable.
3. Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate.
(a) Not earlier than the Submission Deadline on each Auction Date for a
series of Tortoise Notes, the Auction Agent shall assemble all valid Orders
submitted or deemed submitted to it by the Broker-Dealers in respect of Tortoise
Notes of such series (each such Order as submitted or deemed submitted by a
Broker-Dealer being hereinafter referred to individually as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as
a "Submitted Order" and collectively as "Submitted Hold Orders," "Submitted
Bids" or "Submitted Sell Orders," as the case may be, or as "Submitted Orders")
and shall determine for such series:
A-4
(i) the excess of the aggregate principal amount of
Outstanding Tortoise Notes of such series over the principal amount of
Outstanding Tortoise Notes of such series subject to Submitted Hold
Orders (such excess being hereinafter referred to as the "Available
Tortoise Notes" of such series);
(ii) from the Submitted Orders for Tortoise Notes of such
series whether:
(A) the aggregate principal amount of Outstanding
Tortoise Notes of such series subject to Submitted Bids of
Potential Holders specifying one or more rates between the
Minimum Rate (for Standard Rate Periods or less, only) and the
Maximum Rate (for all Rate Periods) for Tortoise Notes of such
series;
exceeds or is equal to the sum of:
(B) the aggregate principal amount of Outstanding
Tortoise Notes of such series subject to Submitted Bids of
Existing Holders specifying one or more rates between the
Minimum Rate (for Standard Rate Periods or less, only) and the
Maximum Rate (for all Rate Periods) for Tortoise Notes of such
series; and
(C) the aggregate principal amount of Outstanding
Tortoise Notes of such series subject to Submitted Sell Orders
(in the event such excess or such equality exists (other than because
all of the Outstanding Tortoise Notes of such series are subject to
Submitted Hold Orders), such Submitted Bids in subclause (A) above
being hereinafter referred to collectively as "Sufficient Clearing
Bids" for Tortoise Notes of such series); and
(iii) if Sufficient Clearing Bids for Tortoise Notes of such
series exist, the lowest rate specified in such Submitted Bids (the
"Winning Bid Rate" for Tortoise Notes of such series) which if:
(A) (I) each such Submitted Bid of Existing Holders
specifying such lowest rate and (II) all other such Submitted
Bids of Existing Holders specifying lower rates were rejected,
thus entitling such Existing Holders to continue to hold the
Tortoise Notes of such series that are subject to such
Submitted Bids; and
(B) (I) each such Submitted Bid of Potential Holders
specifying such lowest rate and (II) all other such Submitted
Bids of Potential Holders specifying lower rates were
accepted;
would result in such Existing Holders described in subclause (A) above
continuing to hold an aggregate principal amount of Outstanding
Tortoise Notes of such series which, when added to the aggregate
principal amount of Outstanding Tortoise Notes of such series to be
purchased by such Potential Holders described in subclause (B) above,
would equal not less than the Available Tortoise Notes of such series.
(b) Promptly after the Auction Agent has made the determinations
pursuant to paragraph (a) of this Section 3, the Auction Agent shall advise the
Issuer of the Minimum Rate and Maximum Rate for the series of Tortoise Notes for
which an Auction is being held on the Auction Date and, based on such
determination, the Applicable Rate for Tortoise Notes of such series for the
next succeeding Rate Period thereof as follows:
(i) if Sufficient Clearing Bids for Tortoise Notes of such
series exist, that the Applicable Rate for all Tortoise Notes of such
series for the next succeeding Rate Period thereof shall be equal to
the Winning Bid Rate for Tortoise Notes of such series so determined;
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 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
A-6
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
A-7
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 NOTES
[TO COME]
B-1
APPENDIX C
FORM OF TRUSTEE AUTHENTICATION CERTIFICATE
[TO COME]
C-1