EXHIBIT K.5
FORM OF BROKER-DEALER AGREEMENT
This Broker-Dealer Agreement dated as of June __, 2004, is between The
Bank of New York (the "Auction Agent") (not in its individual capacity, but
solely as agent of Tortoise Energy Infrastructure Corporation (the "Company")),
pursuant to authority granted to it in the Auction Agency Agreement between the
Company and the Auction Agent dated as of June __, 2004 (the "Auction Agency
Agreement") and _______ (together with its successors and assigns, the
"Broker-Dealer").
The Company proposes to offer $____ and $____ aggregate principal
amount of auction rate senior notes Series ____ and Series ____ (collectively,
the "Tortoise Notes"), authorized by, and subject to the terms and conditions
of, the Supplemental Indenture of Trust by and between the Company and
______________, in its capacity as trustee (the "Trustee"), dated June _____,
2004 (the "Supplemental Indenture"), which supplements the Indenture, dated June
__, 2004, by and between the Company and the Trustee.
The Supplemental Indenture provides that for each Rate Period of
outstanding series of Tortoise Notes following the initial Rate Period, the
Applicable Rate for each series of Tortoise Notes shall be equal to the rate per
annum that results from an Auction for outstanding notes of each series of
Tortoise Notes. The Board of Directors of the Company has adopted resolutions
appointing The Bank of New York as Auction Agent for purposes of the Auction
Procedures, and pursuant to Section 2.5 of the Auction Agency Agreement, the
Company has requested and directed the Auction Agent to execute and deliver this
Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Auction Agent and Broker-Dealer agree as
follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Supplemental Indenture.
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Capitalized terms used herein but not defined herein shall have the
respective meanings specified in the Supplemental Indenture.
1.2 Terms Defined Herein.
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As used herein, the following terms shall have the following meanings,
unless the context otherwise requires:
(a) "Auction" shall have the meaning specified in Section 2.1
of the Auction Agency Agreement.
(b) "Auction Procedures" shall mean the procedures as from
time to time in effect for conducting Auctions that are set forth
Appendix A of the Supplemental Indenture.
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(c) "Authorized Officer" shall mean each Vice President,
Assistant Vice President and Associate of the Auction Agent and every
other officer or employee of the Auction Agent designated as an
"Authorized Officer" for purposes hereof in a written communication
from the Auction Agent to the Company.
(d) "Broker-Dealer Officer" shall mean each officer or
employee of a Broker-Dealer designated as a "Broker-Dealer Officer" for
purposes of this Agreement in a written communication to the Auction
Agent.
(e) "Broker-Dealer Agreement" shall mean this Agreement and
any substantially similar agreement between the Auction Agent and a
Broker-Dealer.
(f) "Supplemental Indenture" shall mean the Supplemental
Indenture by and between the Company and ____________________, dated
June __, 2004, as amended or supplemented.
1.3 Rules of Construction.
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Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of this
Agreement, nor shall they affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be
to New York City time.
II. NOTIFICATION OF INTEREST.
The provisions contained in Article II, Section 2.04 of the
Supplemental Indenture concerning the notification of a Special Rate Period will
be followed by the Auction Agent and Broker-Dealer, and the provisions contained
therein are incorporated herein by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
were set forth fully herein.
III. THE AUCTION.
3.1 Purpose; Incorporation by Reference of Auction Procedures.
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(a) On each Auction Date, the provisions of the Auction
Procedures will be followed by the Auction Agent for the purpose of
determining the Applicable Rate for the
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Tortoise Notes for the next Rate Period. Each periodic operation of
such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures
are incorporated herein by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such
provisions were set forth fully herein. In the case of any conflict
between the terms of any document incorporated herein by reference and
the terms hereof, the terms in this agreement shall control.
(c) Broker-Dealer agrees to act as, and assumes the
obligations of and limitations and restrictions placed upon, a
Broker-Dealer under this Agreement. Broker-Dealer understands that
other persons meeting the requirements specified in the definition of
"Broker-Dealer" contained in Article I, Section 1.01 of the
Supplemental Indenture may execute a Broker-Dealer Agreement and
participate as Broker-Dealers in Auctions.
(d) Broker-Dealer and other Broker-Dealers may participate in
Auctions for their own accounts. However, the Company, by notice to
Broker-Dealer and all other Broker Dealers, may prohibit all
Broker-Dealers from submitting Bids in Auctions for their own accounts,
provided that Broker-Dealers may continue to submit Hold Orders and
Sell Orders.
3.2 Preparation for Each Auction.
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(a) Not later than 9:30 a.m. on each Auction Date for the
Tortoise Notes, the Auction Agent shall advise Broker-Dealer by
telephone of the Reference Rate and the Maximum Rate in effect on such
Auction Date.
(b) In the event that the Auction Date for any Auction shall
be changed after the Auction Agent has given the notice referred to in
paragraph (a) of the settlement procedures set forth on Exhibit A
hereto (the "Settlement Procedures"), the Auction Agent, by such means
as the Auction Agent reasonably deems practicable, shall give notice of
such change to Broker-Dealer not later than the earlier of 9:15 a.m. on
the new Auction Date or 9:15 a.m. on the old Auction Date. Thereafter,
Broker-Dealer promptly shall notify customers of Broker-Dealer that
Broker-Dealer believes are Beneficial Owners of Tortoise Notes of such
change in the Auction Date.
(c) The Auction Agent from time to time may request
Broker-Dealer to provide it with a list of the respective customers
Broker-Dealer believes are Beneficial Owners of Tortoise Notes.
Broker-Dealer shall comply with any such request, and the Auction Agent
shall keep confidential any such information, including information
received as to the identity of Bidders in any Auction, and shall not
disclose any such information so provided to any Person other than the
Company; and such information shall not be used by the Auction Agent or
its officers, employees, agents or representatives for any purpose
other than such purposes as are described herein. Notwithstanding the
foregoing, the Auction Agent reserves the right and is authorized to
disclose any such information if (a) it is ordered to do so by a court
of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the authority to compel such
disclosure or (b) it is advised by its counsel that its failure to do
so would be unlawful. In the event that the Auction Agent is required
to disclose information in accordance with the
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foregoing sentence, it shall provide written notice of such requirement
to Broker-Dealer as promptly as practicable. The Auction Agent shall
transmit any list of customers Broker-Dealer believes are Beneficial
Owners of Tortoise Notes and information related thereto only to its
officers, employees, agents or representatives who need to know such
information for the purposes of acting in accordance with this
Agreement, and the Auction Agent shall prevent the transmission of such
information to others and shall cause its officers, employees, agents
and representatives to abide by the foregoing confidentiality
restrictions.
3.3 Auction Schedule; Method of Submission of Orders.
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(a) The Company and the Auction Agent shall conduct Auctions
for the Tortoise Notes in accordance with the schedule set forth below.
Such schedule may be changed at any time by the Auction Agent with the
consent of the Company, which consent shall not be withheld
unreasonably. The Auction Agent shall give notice of any such change to
Broker-Dealer. Such notice shall be received prior to the first Auction
Date on which any such change shall be effective.
Time Event
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By 9:30 a.m. The Auction Agent shall advise the Company
and the Broker-Dealers of the Reference Rate
and the Maximum Rate as set forth in Section
3.2(a) hereof.
9:30 a.m. - 1:00 p.m. The Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Section 2 of Appendix A of the
Supplemental Indenture. Submission Deadline
is 1:00 p.m.
Not earlier than 1:00 p.m. The Auction Agent shall make determinations
pursuant to Section 3 of Appendix A of the
Supplemental Indenture.
By approximately 3:00 p.m. The Auction Agent shall advise the Company
of the results of the Auction as provided in
Section 3(b) of Appendix A of the
Supplemental Indenture. Submitted Bids and
Submitted Sell Orders will be accepted and
rejected in whole or in part and Tortoise
Notes will be allocated as provided in
Section 4 of Appendix A of the Supplemental
Indenture.
The Auction Agent shall give notice of the
Auction results as set forth in Section
3.4(a) hereof.
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The Auction Agent will follow the Bond Market Association's Market
Practice U.S. Holiday Recommendations for shortened trading days for the bond
markets (the "BMA Recommendation") unless the Auction Agent is instructed
otherwise. In the event of a BMA Recommendation on an Auction Date, the
Submission Deadline will be 11:30 a.m., instead of 1:00 p.m., and as a result
the notice set forth in Section 3.3 will occur earlier.
(b) Broker-Dealer agrees to maintain a list of Potential
Beneficial Owners and to contact the Potential Beneficial Owners on
such list on or prior to each Auction Date for the purposes set forth
in Section 1(a)(ii) of Appendix A of the Supplemental Indenture.
(c) Broker-Dealer shall submit Orders to the Auction Agent in
writing in substantially the form attached hereto as Exhibit B.
Broker-Dealer shall submit separate Orders to the Auction Agent for
each Potential Beneficial Owner or Beneficial Owner on whose behalf
Broker-Dealer is submitting an Order and shall not net or aggregate the
Orders of Potential Beneficial Owners or Beneficial Owners on whose
behalf Broker-Dealer is submitting Orders.
(d) Broker-Dealer shall deliver to the Auction Agent (i) a
written notice, substantially in the form attached hereto as Exhibit C,
of transfers of Tortoise Notes, made through Broker-Dealer by an
Existing Holder to another Person other than pursuant to an Auction,
and (ii) a written notice, substantially in the form attached hereto as
Exhibit D, of the failure of Tortoise Notes to be transferred to or by
any Person that purchased or sold Tortoise Notes through Broker-Dealer
pursuant to an Auction. The Auction Agent is not required to accept any
notice delivered pursuant to the terms of the foregoing sentence with
respect to an Auction unless it is received by the Auction Agent by
3:00 p.m. on the Business Day preceding the applicable Auction Date.
3.4 Notice of Auction Results.
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(a) On each Auction Date, the Auction Agent shall provide to
Broker-Dealer the notice required by paragraph (a) of the Settlement
Procedures. On the Business Day next succeeding such Auction Date, the
Auction Agent shall notify Broker-Dealer in writing of the disposition
of all Orders submitted by Broker-Dealer in the Auction held on such
Auction Date.
(b) Broker-Dealer shall notify each Beneficial Owner,
Potential Beneficial Owner, Existing Holder or Potential Holder on
whose behalf Broker-Dealer has submitted an Order as set forth in
paragraph (b) of the Settlement Procedures, and take such other action
as is required of Broker-Dealer pursuant to the Settlement Procedures.
If any Beneficial Owner or Existing Holder selling Tortoise Notes in an
Auction fails to deliver such Tortoise Notes, the Broker-Dealer of any Person
that was to have purchased Tortoise Notes in such Auction may deliver to such
Person a number of whole Tortoise Notes that is less than the number of Tortoise
Notes that otherwise was to be purchased by such Person. In such event, the
number of Tortoise Notes to be so delivered shall be determined by such
Broker-Dealer. Delivery of such lesser number of Tortoise Notes shall constitute
good delivery. Upon the occurrence of any such failure to deliver Tortoise
Notes, such Broker-Dealer shall deliver to the Auction Agent the notice required
by Section 3.3(d)(ii) hereof. Notwithstanding
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the foregoing terms of this Section 3.4(b), any delivery or non-delivery of
Tortoise Notes which represents any departure from the results of an Auction, as
determined by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or non-delivery in
accordance with the terms of Section 3.3(d) hereof.
3.5 Service Charge to be Paid to Broker-Dealer.
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Not later than 3:00 p.m. on each Interest Payment Date, the Auction
Agent after each Auction will pay to each Broker-Dealer, from funds provided by
the Company, a service charge in the amount equal to: (i) in the case of any
Auction immediately preceding a Rate Period of less than one year, the product
of (A) a fraction the numerator of which is the number of days in the Rate
Period (calculated by counting the first day of such Rate Period but excluding
the last day thereof) and the denominator of which is 360, times (B) 1/4 of 1%,
times (C) $25,000 times (D) the sum of the aggregate number of Tortoise Notes
placed by such Broker-Dealer, or (ii) the amount mutually agreed upon by the
Company and the Broker-Dealers in the case of any Auction immediately preceding
a Rate Period of one year or longer. For the purposes of the preceding sentence,
the Tortoise Notes shall be placed by a Broker-Dealer if such notes were (i) the
subject of Hold Orders deemed to have been submitted to the Auction Agent by the
Broker-Dealer and were acquired by the Broker-Dealer for its own account or were
acquired by the Broker-Dealer for its customers who are Beneficial Owners or
(ii) the subject of an Order submitted by the Broker-Dealer that is (a) a
Submitted Bid of an Existing Holder that resulted in the Existing Holder
continuing to hold the notes as a result of the Auction or (b) a Submitted Bid
of a Potential Holder that resulted in the Potential Holder purchasing the notes
as a result of the Auction or (iii) a valid Hold Order. For the avoidance of
doubt, only one Broker-Dealer shall be considered to have placed a particular
Note at any particular Auction for purposes of this Section 3.5.
IV. THE AUCTION AGENT.
4.1 Duties and Responsibilities.
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(a) The Auction Agent is acting solely as agent for the
Company hereunder and owes no fiduciary duties to any Person.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are set forth specifically in this Agreement, and
no implied covenants or obligations shall be read into this Agreement
against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered or
omitted by it, or for any error of judgment made by it in the
performance of its duties under this Agreement. The Auction Agent shall
not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been grossly negligent in ascertaining (or
failing to ascertain) the pertinent facts.
4.2 Rights of the Auction Agent.
----------------------------
(a) The Auction Agent may conclusively rely upon, and shall be
fully protected in acting or refraining from acting in accordance with,
any communication authorized by this
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Agreement and any proper written instruction, notice, request,
direction, consent, report, certificate, certificate or other
instrument, paper or document reasonably believed by it to be genuine
and appropriately authorized. The Auction Agent shall not be liable for
acting upon any telephone communication authorized by this Agreement
which the Auction Agent reasonably believes in good faith, after
reasonable inquiry, to have been given by the Company or by a
Broker-Dealer. The Auction Agent may record telephone communications
with the Company or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its choice
and the advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
the Auction Agent hereunder in good faith and in reasonable reliance
thereon.
(c) The Auction Agent shall not be required to advance, expend
or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder. Unless otherwise
instructed by the Company in writing, the Auction Agent (i) shall not
be obligated to invest any money received by it hereunder and (ii)
shall be under no liability for interest on any money received by it
hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys
and shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed by it with due care hereunder.
(e) The Auction Agent shall not be responsible or liable for
any failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotage; epidemics; riots; acts of terrorism;
interruptions, loss or malfunctions of utilities, computer (hardware or
software) or communications services; accidents; labor disputes; acts
of civil or military authority or governmental actions; it being
understood that the Auction Agent shall use reasonable efforts which
are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.
(f) The Auction Agent shall not be required to, and does not,
make any representations as to the validity, accuracy, value or
genuineness of any signatures or endorsements, other than its own and
those of its authorized officers.
(g) Any corporation into which the Auction Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Auction Agent shall be a party, or any corporation succeeding to the
dealing and trading business of the Auction Agent shall be the
successor of the Auction Agent hereunder, with the consent of the
Company but without the execution or filing of any paper with any party
hereto or any further act on the part of any of the parties hereto,
except where any instrument of transfer or assignment may be required
by law to effect such succession, anything herein to the contrary
notwithstanding.
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(h) All the rights, privileges, immunities and protections
granted to the Auction Agent herein are deemed granted to the Paying
Agent and The Bank of New York in any of the capacities it undertakes
in connection with this Agreement.
(i) Whenever in the administration of the provisions of this
Agreement, the Auction Agent shall deem it necessary or desirable that
a matter be proved or established prior to taking or suffering any
action to be taken hereunder, such matter, in the absence of negligence
or bad faith on the part of the Auction Agent, shall be deemed to be
conclusively proved and established by a certificate describing the
action requested by the Company or the Broker Dealer, signed by the
Company or the Broker Dealer, respectively, and delivered to the
Auction Agent and such certificate, in the absence of negligence or bad
faith on the part of the Auction Agent, shall be full warrant to the
Auction Agent for any action taken or omitted by it under the
provisions of this Agreement upon the faith thereof. Upon receipt of
any such certificate signed by the Company or the Broker-Dealer, the
Auction Agent shall promptly provide a copy of said certificate to the
Broker-Dealer or the Company, respectively. The Auction Agent shall not
be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, entitlement, order, approval or other paper
or document furnished by the Company or the Broker-Dealer, except to
the extent that such failure to investigate would be deemed grossly
negligent.
V. MISCELLANEOUS.
5.1 Termination.
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Any party may terminate this Agreement at any time upon five days'
prior written notice to the other party; provided, however, that if the
Broker-Dealer is Xxxxxx Brothers Inc., either Xxxxxx Brothers Inc. or the
Auction Agent may terminate this Agreement only upon 60 days' prior written
notice to the other party and to the Company. This Agreement shall automatically
terminate upon the redemption of all outstanding Tortoise Notes or upon
termination of the Auction Agency Agreement.
5.2 Force Majeure
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Neither party to this Agreement shall be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
acts of terrorism; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or communications services; accidents; labor disputes;
acts of civil or military authority or governmental actions; it being understood
that the parties shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
5.3 Participant in Securities Depository; Payment of Interest in
Same-Day Funds.
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(a) Broker-Dealer is at the date hereof, and shall remain for
the term of this Agreement, a member of, or a participant in, the
Securities Depository (or an affiliate of such a member or
participant).
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(b) Broker-Dealer represents that it (or if Broker-Dealer does
not act as Agent Member, one of its affiliates) shall make all interest
payments on the Tortoise Notes available in same-day funds on each
Interest Payment Date to customers that use Broker-Dealer (or its
affiliate) as Agent Member.
5.4 Communications.
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(a) Except for (i) communications authorized to be made by
telephone pursuant to this Agreement or the Auction Procedures and (ii)
communications with the Auctions (other than those expressly required
to be made in writing), all notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or
similar writing) and shall be given to such party at its address or
telecopier number set forth below:
If to the Auction Agent,
addressed to:
The Bank of New York
[ADDRESS]
[CITY, STATE ZIP]
Telephone:
Facsimile:
If to the Broker-Dealer,
addressed to:
Telephone:
Facsimile:
or such other address or telecopier number as such party hereafter may specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of Broker-Dealer by a Broker-Dealer
Officer and on behalf of the Auction Agent by an Authorized Officer.
Broker-Dealer may record telephone communications with the Auction Agent.
5.5 Entire Agreement.
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This Agreement contains the entire agreement between the parties
relating to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof.
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5.6 Benefits.
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Nothing in this Agreement, express or implied, shall give to any
person, other than the Company, which is a third party beneficiary of this
Agreement, the Auction Agent and Broker-Dealer and their respective successors
and permitted assigns, any benefit of any legal or equitable right, remedy or
claim under this Agreement.
5.7 Amendment; Waiver.
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(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part,
except by a written instrument signed by a duly authorized
representative of the party to be charged.
(b) Failure of either party to this Agreement to exercise any
right or remedy hereunder in the event of a breach of this Agreement by
the other party shall not constitute a waiver of any such right or
remedy with respect to any subsequent breach.
5.8 Successors and Assigns.
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This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of
Broker-Dealer and the Auction Agent. This Agreement may not be assigned by
either party hereto absent the prior written consent of the other party.
5.9 Severability.
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If any clause, provision or section of this Agreement shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity
or unenforceability of such clause, provision or section shall not affect any
remaining clause, provision or section hereof.
5.10 Execution in Counterparts.
--------------------------
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
5.11 Governing Law, Jurisdiction, Waiver of Trial By Jury.
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THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW, OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF NEW YORK). THE PARTIES AGREE HERETO THAT ALL ACTIONS AND
PROCEEDINGS ARISING OUT OF THIS BROKER-DEALER AGREEMENT OR ANY TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE BROUGHT IN THE COURTS LOCATED IN THE BOROUGH OF
MANHATTAN, CITY OF NEW YORK, STATE OF NEW YORK.
EACH PARTY WAIVES ANY OBJECTION THAT IT MAY HAVE THAT SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN THE COURTS LOCATED IN THE
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XXXXXXX XX XXXXXXXXX, XXXX XX XXX XXXX AND STATE OF NEW YORK WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME. EACH OF THE
PARTIES HERETO ALSO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
The Bank of New York, as Auction Agent
By:___________________________________
Name:
Title:
[Broker-Dealer]
By:___________________________________
Name:
Title:
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EXHIBIT A
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SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings
specified in the Supplemental Indenture.
(a) On each Auction Date, the Auction Agent shall notify by telephone,
or through the Auction Agent's auction processing system, the Broker-Dealers
that participated in the Auction held on such Auction Date and submitted an
Order on behalf of any Beneficial Owner or Potential Beneficial Owner of:
(i) the Applicable Rate fixed for the next succeeding Rate Period;
(ii) whether Sufficient Clearing Bids existed for the determination of
the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer") submitted a
Bid or a Sell Order on behalf of a Beneficial Owner, the number of Tortoise
Notes, if any, to be sold by such Beneficial Owner;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a Bid
on behalf of a Potential Beneficial Owner, the number of Tortoise Notes, if any,
to be purchased by such Potential Beneficial Owner;
(v) if the aggregate number of Tortoise Notes to be sold by all
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid or a Sell
Order exceeds the aggregate number of Tortoise Notes to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid,
the name or names of one or more Buyer's Broker-Dealers (and the name of the
Agent Member, if any, of each such Buyer's Broker-Dealer) acting for one or more
purchasers of such excess number of Tortoise Notes and the number of such
Tortoise Notes to be purchased from one or more Beneficial Owners on whose
behalf such Broker-Dealer acted by one or more Potential Beneficial Owners on
whose behalf each of such Buyer's Broker-Dealers acted;
(vi) if the aggregate number of Tortoise Notes to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid
exceeds the aggregate number of Tortoise Notes to be sold by all Beneficial
Owners on whose behalf such Broker-Dealer submitted a Bid or a Sell Order, the
name or names of one or more Seller's Broker-Dealers (and the name of the Agent
Member, if any, of each such Seller's Broker-Dealer) acting for one or more
sellers of such excess number of Tortoise Notes and the number of such Tortoise
Notes to be sold to one or more Potential Beneficial Owners on whose behalf such
Broker-Dealer acted by one or more Beneficial Owners on whose behalf each of
such Seller's Broker-Dealers acted; and
A-1
(vii) the Auction Date of the next succeeding Auction with respect to
the Tortoise Notes.
(b) On each Auction Date, each Broker-Dealer that submitted an Order on
behalf of any Beneficial Owner or Potential Beneficial Owner shall:
(i) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer,
instruct each Potential Beneficial Owner on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, to instruct such
Potential Beneficial Owner's Agent Member to pay to such Broker-Dealer (or its
Agent Member) through the Securities Depository the amount necessary to purchase
the number of Tortoise Notes to be purchased pursuant to such Bid against
receipt of such Tortoise Notes and advise such Potential Beneficial Owner of the
Applicable Rate for the next succeeding Rate Period;
(ii) in the case of a Broker-Dealer that is a Seller's Broker-Dealer,
instruct each Beneficial Owner on whose behalf such Broker-Dealer submitted a
Sell Order that was accepted, in whole or in part, or a Bid that was accepted,
in whole or in part, to instruct such Beneficial Owner's Agent Member to deliver
to such Broker-Dealer (or its Agent Member) through the Securities Depository
the number of Tortoise Notes to be sold pursuant to such Order against payment
therefor and advise any such Beneficial Owner that will continue to hold
Tortoise Notes of the Applicable Rate for the next succeeding Rate Period;
(iii) advise each Beneficial Owner on whose behalf such Broker-Dealer
submitted a Hold Order of the Applicable Rate for the next succeeding Rate
Period;
(iv) advise each Beneficial Owner on whose behalf such Broker-Dealer
submitted an Order of the Auction Date for the next succeeding Auction; and
(v) advise each Potential Beneficial Owner on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part, of the
Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to (a)
above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf of a
Potential Beneficial Owner or a Beneficial Owner shall, in such manner and at
such time or times as in its sole discretion it may determine, allocate any
funds received by it pursuant to (b)(i) above and any Tortoise Notes received by
it pursuant to (b)(ii) above among the Potential Beneficial Owners, if any, on
whose behalf such Broker-Dealer submitted Bids, the Beneficial Owners, if any,
on whose behalf such Broker-Dealer submitted Bids that were accepted or Sell
Orders, and any Broker-Dealer or Broker-Dealers identified to it by the Auction
Agent pursuant to (a)(v) or (a)(vi) above.
(d) On each Auction Date:
(i) each Potential Beneficial Owner and Beneficial Owner shall instruct
its Agent Member as provided in (b)(i) or (ii) above, as the case may be;
(ii) each Seller's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay through the
Securities
A-2
Depository to the Agent Member of the Beneficial Owner delivering Tortoise Notes
to such Broker-Dealer pursuant to (b)(ii) above the amount necessary to purchase
such Tortoise Notes against receipt of such Tortoise Notes, and (B) deliver such
Tortoise Notes through the Securities Depository to a Buyer's Broker-Dealer (or
its Agent Member) identified to such Seller's Broker-Dealer pursuant to (a)(v)
above against payment therefor; and
(iii) each Buyer's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay through the
Securities Depository to a Seller's Broker-Dealer (or its Agent Member)
identified pursuant to (a)(vi) above the amount necessary to purchase the
Tortoise Notes to be purchased pursuant to (b)(i) above against receipt of such
Tortoise Notes, and (B) deliver such Tortoise Notes through the Securities
Depository to the Agent Member of the purchaser thereof against payment
therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d)(i) above shall
instruct the Securities Depository to execute the transactions described in
(b)(i) or (ii) above, and the Securities Depository shall execute such
transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall instruct the
Securities Depository to execute the transactions described in (d)(ii) above,
and the Securities Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall instruct the
Securities Depository to execute the transactions described in (d)(iii) above,
and the Securities Depository shall execute such transactions.
(f) If a Beneficial Owner selling Tortoise Notes in an Auction fails to
deliver such Tortoise Notes (by authorized book-entry), a Broker-Dealer may
deliver to the Potential Beneficial Owner on behalf of which it submitted a Bid
that was accepted a number of whole Tortoise Notes that is less than the number
of Tortoise Notes that otherwise was to be purchased by such Potential
Beneficial Owner. In such event, the number of Tortoise Notes to be so delivered
shall be determined solely by such Broker-Dealer. Delivery of such lesser number
of Tortoise Notes shall constitute good delivery. Notwithstanding the foregoing
terms of this paragraph (f), any delivery or non-delivery of Tortoise Notes
which shall represent any departure from the results of an Auction, as
determined by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or non-delivery in
accordance with the provisions of the Auction Agency Agreement and the
Broker-Dealer Agreements.
A-3
EXHIBIT B
---------
AUCTION BID FORM
Submit To: Issue:
Tortoise Notes of Tortoise Energy Infrastructure
Corporation
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder: ____________________________________
BENEFICIAL OWNER
Notes now held ___________________________ HOLD __________________
BID at rate of ________________
SELL _____________________
POTENTIAL BENEFICIAL OWNER
# of Notes___________
BID at rate of___________ Notes:
(1) If submitting more than one Bid for one Bidder, use additional
Auction Bid Forms.
(2) If one or more Bids covering in the aggregate more than the
number of outstanding Tortoise Notes held by any Beneficial
Owner are submitted, such bid shall be considered valid in the
order of priority set forth in the Auction Procedures on the
above issue.
(3) A Hold or Sell Order may be placed only by a Beneficial Owner
covering a number of Tortoise Notes not greater than the
number of Tortoise Notes currently held.
(4) Potential Beneficial Owners may make only Bids, each of which
must specify a rate. If more than one Bid is submitted on
behalf of any Potential Beneficial Owner, each Bid submitted
shall be a separate Bid with the rate specified.
(5) Bids may contain no more than three figures to the right of
the decimal point (.001 of 1%). Fractions will not be
accepted.
(6) An Order must be submitted in whole Tortoise Notes.
B-1
_________________________________________________
____________________________________________
Authorized Signature:_______________________
Name:
Title:
B-2
EXHIBIT C
---------
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: _________________________________________________________________
("Tortoise Notes")
We are (check one):
[ ] the Existing Holder named below;
[ ] the Broker-Dealer for such Existing Holder; or
[ ] the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has transferred
_________ Tortoise Notes to __________________________________
-------------------------------
(Name of Existing Holder)
-------------------------------
(Name of Broker-Dealer)
-------------------------------
(Name of Agent Member)
By:___________________________________
Printed Name:
Title:
C-1
EXHIBIT D
---------
(Note: To be used only for failures to deliver or to pay for
Tortoise Notes sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for _____________________ (the "Purchaser"),
which purchased _____ Tortoise Notes of ___________________________________
_____________________________________________ in the Auction held on
____________________ from the seller of such Tortoise Notes.
We hereby notify you that (check one):
______ the Seller failed to deliver such Tortoise Notes to the Purchaser.
______ the Purchaser failed to make payment to the Seller upon delivery of such
Tortoise Notes.
Name:__________________________________
By:____________________________________
Printed Name:
Title:
D-1
