Exhibit k.4
TORTOISE ENERGY CAPITAL CORPORATION
AUCTION AGENCY AGREEMENT
dated as of ________________
relating to the
SERIES ___ MONEY MARKET CUMULATIVE PREFERRED(R) SHARES
THE BANK OF NEW YORK
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of
________________, is between Tortoise Energy Capital Corporation (the "Company")
and The Bank of New York.
The Company proposes to issue an aggregate of ______ shares of its Series
__ Money Market Cumulative Preferred(R) Shares, $0.001 par value per share,
liquidation preference of $25,000 per share (the "MMP Shares"), authorized by,
and subject to the terms and conditions of, the Articles Supplementary of Money
Market Cumulative Preferred(R) Shares.
The Company desires that The Bank of New York perform certain duties as
agent in connection with each Auction of MMP Shares (in such capacity, the
"Auction Agent"), and as the transfer agent, registrar, dividend paying agent
and redemption agent with respect to the MMP Shares (in such capacity, the
"Paying Agent"), upon the terms and conditions set forth in this Agreement, and
the Company hereby appoints The Bank of New York as said Auction Agent and
Paying Agent in accordance with those terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company and the Auction Agent agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Articles Supplementary.
Capitalized terms used herein but not defined herein shall have the
respective meanings specified in the Articles Supplementary.
1.2 Certain Defined Terms.
As used herein and in the Settlement Procedures, the following terms shall
have the following meanings, unless the context otherwise requires:
(a) "Agent Member" shall mean a member of, or participant in, the
Securities Depository that will act on behalf of a Bidder.
(b) "Articles Supplementary" shall mean the Articles Supplementary for
the Series ___ Money Market Cumulative Preferred(R) Shares of the Company
dated ________________, specifying the powers, preferences and rights of
the MMP Shares.
(c) "Auction" shall have the meaning specified in Section 2.1 hereof.
(d) "Auction Procedures" shall mean the procedures as from time to
time in effect for conducting Auctions that are set forth in Part II of the
Articles Supplementary.
(e) "Authorized Officer" shall mean (i) in the case of the Auction
Agent, each Vice President, Assistant Vice President and Assistant
Treasurer of the Auction Agent assigned to the Dealing and Trading Group of
its Corporate Trust Division and every
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other officer or employee of the Auction Agent designated an "Authorized
Officer" for purposes hereof in a written communication delivered to the
Company and (ii) in the case of the Company, its Chief Financial Officer
and every other officer or employee of the Company designated an
"Authorized Officer" for purposes hereof in a written communication
delivered to the Auction Agent.
(f) "Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent and a broker-dealer substantially in the form attached hereto
as Exhibit A.
(g) "Closing" shall mean the date the Company consummates the
transactions for the issuance and sale of the MMP Shares.
(h) "Company Officer" shall mean the President, each Vice President
(whether or not designated by a number or word or words added before or
after the title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant Treasurer of the Company and every
other officer or employee of the Company designated as a "Company Officer"
for purposes hereof in a notice from the Company to the Auction Agent.
(i) "Holder" means, with respect to MMP Shares, the registered holder
of MMP Shares as the same appears on the share ledger or share records of
the Company.
(j) "Rate Multiple" shall have the meaning assigned to it in Section
2.8.
(k) "Settlement Procedures" shall mean the Settlement Procedures
attached as Exhibit A to the Broker-Dealer Agreement.
1.3 Rules of Construction.
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.
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II. THE AUCTION.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Board of Directors of the Company has adopted a resolution
appointing The Bank of New York as Auction Agent for purposes of the
Auction Procedures. The Auction Agent hereby accepts such appointment and
agrees that, on each Auction Date, it shall follow (i) the procedures set
forth in this Section 2 and (ii) the Auction Procedures for the purpose of
determining the Applicable Rate for the MMP Shares for the next Dividend
Period. Each periodic operation of such procedures is hereinafter referred
to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and in
the Settlement 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.
2.2 Preparation for Each Auction; Maintenance of Registry of Existing
Holders.
(a) As of the date hereof, the Company shall provide the Auction Agent
with a list of the Broker-Dealers and shall deliver to the Auction Agent
for execution by the Auction Agent a Broker-Dealer Agreement signed by each
such Broker-Dealer. Not later than five Business Days prior to any Auction
Date for which any change in such list of Broker-Dealers is to be
effective, the Company shall notify the Auction Agent in writing of such
change and, if any such change is the addition of a Broker-Dealer to such
list, the Company shall cause to be delivered to the Auction Agent for
execution by the Auction Agent a Broker-Dealer Agreement signed by such
Broker-Dealer. The Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(b) In the event that the Auction Date for any Auction shall be
changed, the Auction Agent, by such means as the Auction Agent reasonably
deems practicable, shall give notice of such change to the Broker-Dealers
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.
(c) The provisions contained in Section 4(b) of Part I of the Articles
Supplementary concerning Special Dividend Periods and the notification of a
Special Dividend Period will be followed by the Company and, to the extent
applicable, the Auction Agent, 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.
(d) (i) On each Auction Date, the Auction Agent shall determine the
Maximum Rate. Not later than 10:30 a.m. on each Auction Date, the Auction
Agent shall notify the Company and the Broker-Dealers of the Maximum Rate.
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(ii) If the Reference Rate is the applicable "AA" Composite Commercial
Paper Rate and such rate is to be based on rates supplied by Commercial
Paper Dealers and one or more of the Commercial Paper Dealers shall not
provide a quotation for the determination of the applicable "AA" Composite
Commercial Paper Rate, the rate shall be determined on the basis of the
quotations (or quotation) furnished by the remaining Commercial Paper
Dealer(s), if any, or, if there are no such Commercial Paper Dealers, by a
nationally recognized dealer in commercial paper of such issuers then
making such quotations selected by the Company.
(e) (i) The Auction Agent shall maintain a registry of the Existing
Holders of the MMP Shares (the "MMP Shares Register") for purposes of
Auctions and shall indicate thereon the identity of the Broker-Dealer that
submitted the most recent Order in any Auction, which resulted in such
Existing Holder continuing to hold or purchase such MMP Shares. The Auction
Agent may consider a Broker-Dealer which has submitted an Order as the
Existing Holder for the purposes of the MMP Shares Register; provided, that
the Auction Agent may request the Broker-Dealer to provide a list of its
customers if in its sole discretion it determines to do so. The Auction
Agent may conclusively rely upon the information furnished to the Auction
Agent by the Broker-Dealer and notices from the Securities Depository
regarding the results of redemptions or mandatory tenders.
(ii) In the event of any partial redemption of MMP Shares, upon notice
by the Company to the Auction Agent of such partial redemption (delivered
at least one day prior to the date a notice of redemption is required to be
given to the Holders of the MMP shares to be redeemed), the Auction Agent
shall at least three (3) Business Days prior to the date of redemption
request the Securities Depository to notify the Auction Agent of the
identities of the Agent Members (and the respective numbers of MMP Shares)
from the accounts of which MMP Shares have been called for redemption and
the person or department at such Agent Member to contact regarding such
redemption. At least two Business Days prior to the date of redemption, the
Auction Agent shall request each Broker-Dealer so identified to disclose to
the Auction Agent (upon selection by such Agent Member of the Existing
Holders whose MMP Shares are to be redeemed) the number of MMP Shares of
each such Existing Holder, if any, to be redeemed by the Company, provided
that the Auction Agent has been furnished with the name and telephone
number of a person or department at such Broker-Dealer from which it is to
request such information. In the absence of receiving any such information
with respect to an Existing Holder, from such Existing Holder's Agent
Member or otherwise, the Auction Agent may continue to treat such Existing
Holder as having ownership of the number of MMP Shares shown in the Auction
Agent's registry of Existing Holders.
(iii) The Auction Agent shall register a transfer of the ownership of
MMP Shares from an Existing Holder to another Existing Holder, or to
another Person if permitted by the Company, only if (A) such transfer is
made pursuant to an Auction or (B) if such transfer is made other than
pursuant to an Auction, the Auction Agent has been notified of such
transfer in writing, in a notice substantially in the form of Exhibit C to
the Broker-Dealer Agreement, by such Existing Holder or by the Agent Member
of such Existing Holder only to or through a Broker-Dealer that has entered
into a Broker-Dealer Agreement with the Auction Agent and the Company or
other persons as the
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Company permits. The Auction Agent is not required to accept any notice of
transfer delivered for an Auction unless it is received by the Auction
Agent by 3:00 p.m. on the Business Day preceding the Auction. The Auction
Agent shall rescind a transfer made on the registry of the Existing Holders
of any MMP Shares if the Auction Agent has been notified in writing, in a
notice substantially in the form of Exhibit D to the Broker-Dealer
Agreement, by the Agent Member or the Broker-Dealer of any Person that (i)
purchased any MMP Shares and the seller failed to deliver such MMP Shares
or (ii) sold any MMP Shares and the purchaser failed to make payment to
such Person upon delivery to the purchaser of such MMP Shares.
(f) The Auction Agent may, but shall have no obligation to, request
that the Broker-Dealers, as set forth in Section 3.2(c) of the
Broker-Dealer Agreements, provide the Auction Agent with a list of their
respective customers that such Broker-Dealers believe are Beneficial Owners
of MMP Shares. The Auction Agent shall keep confidential any such
information and shall not disclose any such information so provided to any
Person other than the relevant Broker-Dealer and the Company, provided that
the Auction Agent reserves the right 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, (b) it is advised by its counsel in
writing that its failure to do so would be unlawful or (c) it is advised by
its counsel in writing that failure to do so could expose the Auction Agent
to loss, liability, claim or damage for which it has not received indemnity
or security satisfactory to it.
2.3 Auction Schedule.
The Auction Agent shall conduct Auctions on the Business Day immediately
prior to the start of each Dividend Period in accordance with the schedule set
forth below. Such schedule may be changed 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 each Broker-Dealer. Such notice
shall be received prior to the first Auction Date on which any such change shall
be effective.
Time Event
By 10:30 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 2.2(d) hereof.
10:30 a.m. - 1:00 p.m. The Auction Agent shall assemble information communicated to
it by Broker-Dealers as provided in Section 2 of Part II of
the Articles Supplementary. Submission Deadline is 1:00 p.m.
Not earlier than 1:00 p.m. The Auction Agent shall make
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determinations pursuant to Section 4 of Part II of the
Articles Supplementary.
By approximately 3:00 p.m. The Auction Agent shall advise the Company of the results of
the Auction as provided in Section 4(b) of Part II of the
Articles Supplementary. Submitted Bid Orders and Submitted
Sell Orders will be accepted and rejected in whole or in
part and MMP Shares will be allocated as provided in Section
5 of Part II of the Articles Supplementary.
The Auction Agent shall give notice of the Auction results
as set forth in Section 2.4 hereof.
The Auction Agent will follow the Securities Industry and Financial Markets
Association's Market Practice U.S. Holiday Recommendations for shortened trading
days for the bond markets (the "SIFMA Recommendation") unless the Auction Agent
is instructed otherwise. In the event of a SIFMA 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 2.4 will occur earlier.
2.4 Notice of Auction Results.
The Auction Agent will advise each Broker-Dealer who submitted a Bid or
Sell Order in an Auction whether such Bid or Sell Order was accepted or rejected
in whole or in part and of the Applicable Rate for the next Dividend Period for
the related MMP Shares by telephone or other electronic means acceptable to the
parties. The Auction Agent, unless instructed otherwise in writing by the
Company, is authorized to release the Winning Bid Rate after each Auction for
public dissemination.
2.5 Broker-Dealers.
(a) On each Dividend Payment Date immediately succeeding the Auction
Date, the Auction Agent shall, promptly after its receipt of funds from the
Company, pay to each Broker-Dealer a service charge in the amount equal to:
(i) in the case of any Auction immediately preceding a Dividend Period of
less than one year, the product of (A) a fraction the numerator of which is
the number of days in the Dividend Period (calculated by counting the first
day of such Dividend 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 MMP Shares 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
Dividend Period of one year or longer. For the purposes of the preceding
sentence, the MMP Shares shall be placed by a Broker-Dealer if such shares
were (1) the subject of Hold Orders deemed to have been
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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 (2) 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 shares
as a result of the Auction or (b) a Submitted Bid of a Potential Holder
that resulted in the Potential Holder purchasing the shares as a result of
the Auction or (3) the subject of a valid Hold Order. For the avoidance of
doubt, only one Broker-Dealer shall be considered to have placed a
particular MMP Share at any particular Auction for purposes of this Section
2.5(a).
(b) The Company shall not designate any Person to act as a
Broker-Dealer, or permit an Existing Holder or a Potential Beneficial Owner
to participate in Auctions through any Person other than a Broker-Dealer,
without the prior approval of the Auction Agent, which approval shall not
be withheld unreasonably. Notwithstanding the foregoing, the Company may
designate an Affiliate of Xxxxxx Brothers Inc. to act as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Company.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from time to
time shall enter into such Broker-Dealer Agreements as the Company shall
request in writing.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
2.6 Ownership of MMP Shares and Submission of Bids by the Company and Its
Affiliates.
Neither the Company nor any Affiliate of the Company may submit an Order in
any Auction, except that an Affiliate of the Company that is a Broker-Dealer may
submit an Order. The Company shall notify the Auction Agent if the Company or,
to the best of the Company's knowledge, any Affiliate of the Company becomes a
Beneficial Owner of any MMP Shares. The restrictions in this Section 2.6 shall
in no way limit the activities of the Auction Agent. The Auction Agent shall
have no duty or liability with respect to enforcement of this Section 2.6.
2.7 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Company, its agents, independent
public accountants and counsel, at reasonable times during normal business
hours, access to all books, records, documents and other information concerning
the conduct and results of Auctions, to review and make extracts or copies of
(at the Company's sole cost and expense), provided that any such agent,
accountant or counsel shall furnish the Auction Agent with a letter from the
Company requesting that the Auction Agent afford such person access. The Auction
Agent shall maintain records relating to any Auction for a period of at least
six years after such Auction, and such records, in reasonable detail, shall
reflect accurately and fairly the actions taken by the Auction Agent hereunder.
The Company agrees to keep confidential any information regarding the customers
of any Broker-Dealer received from the Auction Agent in connection with this
Agreement or any Auction, and shall not disclose such information or permit the
disclosure of
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such information without the prior written consent of the applicable
Broker-Dealer to anyone except such agent, accountant or counsel engaged to
audit or review the results of Auctions as permitted by this Section 2.7. The
Company reserves the right to disclose any such information if it is ordered to
do so by a court of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having authority to compel such disclosure,
or if it is advised by its counsel that its failure to do so would be unlawful.
Any such agent, accountant or counsel, before having access to such information,
shall agree to keep such information confidential and not to disclose such
information or permit disclosure of such information without the prior written
consent of the applicable Broker-Dealer, provided that such agent, accountant or
counsel may reserve the right to disclose any such information if it is ordered
to do so by a court of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having authority to compel such disclosure,
or if it is advised by its counsel that its failure to do so would be unlawful.
2.8 Information Concerning Rates.
If there is any change in the credit rating of MMP Shares by a Rating
Agency (or substitute or successor Rating Agencies) then rating the MMP Shares
that results in any change in the applicable percentage of the Reference Rate
used to determine the Maximum Rate for MMP Shares (the "Rate Multiple"), the
Company shall notify the Auction Agent of such change in the Rate Multiple by no
later than the Business Day immediately preceding the next Auction Date. In
determining the Maximum Rate on any Auction Date, the Auction Agent shall be
entitled to rely on the last Rate Multiple for MMP Shares of which it has most
recently received notice from the Company.
III. THE AUCTION AGENT AS PAYING AGENT.
3.1 The Paying Agent.
The Board of Directors of the Company has adopted resolutions appointing
The Bank of New York as Auction Agent and Paying Agent. The Paying Agent hereby
accepts such appointment and agrees to act in accordance with its standard
procedures and the provisions of the Articles Supplementary which are specified
herein with respect to the MMP Shares and as set forth in this Section 3.
3.2 The Company's Notices to the Paying Agent.
Whenever any MMP Shares are to be redeemed, the Company shall mail a Notice
of Redemption by first-class mail, postage prepaid, to the Paying Agent and the
Paying Agent shall mail such notice by first class mail, postage prepaid, to
each Holder of MMP Shares being redeemed and pursuant to Section 3(b) of Part I
of the Articles Supplementary.
3.3 The Company to Provide Funds for Dividends and Redemptions.
(a) Not later than 3:00 p.m. on the Business Day preceding each
Dividend Payment Date, the Company shall deposit with the Paying Agent an
aggregate amount of federal funds or similar same-day funds equal to the
declared dividends to be paid to Holders on such Dividend Payment Date and
shall give the Paying Agent irrevocable
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instructions to apply such funds to the payment of such dividends on such
Dividend Payment Date.
(b) If the Company shall give a Notice of Redemption, then by 12:00
noon on the date fixed for redemption, the Company shall deposit in trust
with the Paying Agent an aggregate amount of federal funds or similar
same-day funds sufficient to redeem such MMP Shares called for redemption
and shall give the Paying Agent irrevocable instructions and authority to
pay the redemption price to the Holders of MMP Shares called for redemption
upon surrender of the certificate or certificates therefor.
3.4 Disbursing Dividends and Redemption Price.
After receipt of the federal funds or similar same-day funds and
instructions from the Company described in Section 3.3 above, the Paying Agent
shall pay to the Holders (or former Holders) entitled thereto (i) on each
corresponding Dividend Payment Date, dividends on the MMP Shares, and (ii) on
any date fixed for redemption, the redemption price of any MMP Shares called for
redemption. The amount of dividends for any Dividend Period to be paid by the
Paying Agent to Holders will be determined by the Company as set forth in
Section 2 of Part I of the Articles Supplementary. The redemption price to be
paid by the Paying Agent to the Holders of any MMP Shares called for redemption
will be determined as set forth in Section 3 of Part I of the Articles
Supplementary. The Paying Agent shall have no duty to determine the redemption
price and may rely conclusively on the amount thereof set forth in the Notice of
Redemption.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1 Original Issue of MMP Share Certificates.
On the Original Issue Date for any MMP Share, one certificate for MMP
Shares shall be issued by the Company and registered in the name of Cede & Co.,
as nominee of the Securities Depository, and countersigned by the Paying Agent.
4.2 Registration of Transfer or Exchange of MMP Shares.
Except as provided in this Section 4.2, the MMP Shares shall be registered
solely in the name of the Securities Depository or its nominee. If the
Securities Depository shall give notice of its intention to resign as such, and
if the Company shall not have selected a substitute Securities Depository
acceptable to the Paying Agent prior to such resignation, then, upon such
resignation of the Securities Depository, the MMP Shares, at the Company's
request and expense, may be registered for transfer or exchange, and new
certificates thereupon shall be issued in the name of the designated transferee
or transferees, upon surrender of the old certificate in form deemed by the
Paying Agent to be endorsed properly for transfer with (a) all necessary
endorsers' signatures guaranteed in such manner and form and by such guarantor
as the Paying Agent may reasonably require, (b) such assurances as the Paying
Agent shall deem necessary or appropriate to evidence the genuineness and
effectiveness of each necessary endorsement and (c) satisfactory evidence of
compliance with all applicable laws relating to the collection of taxes in
connection with any registration of transfer or exchange or funds necessary for
the payment of such taxes. If there is no Securities Depository, at the
Company's option and upon its receipt of such documents as it deems appropriate,
any MMP Shares may be registered
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in the stock register in the name of the Beneficial Owner thereof, and such
Beneficial Owner thereupon will be entitled to receive certificates therefor and
required to deliver certificates thereof upon transfer or exchange thereof at
the Company's expense.
4.3 Removal of Legend.
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing MMP Shares shall be accompanied by an opinion of
counsel stating that such legend may be removed and such MMP Shares may be
transferred free of the restriction described in such legend, said opinion to be
delivered under cover of a letter from a Company Officer authorizing the Paying
Agent to remove the legend on the basis of said opinion.
4.4 Lost, Stolen or Destroyed MMP Share Certificates.
The Paying Agent shall, at the Holder's expense, issue and register
replacement certificates for certificates represented to have been lost, stolen
or destroyed, upon the fulfillment of such requirements as shall be deemed
appropriate by the Company and by the Paying Agent, subject at all times to
provisions of law, the Articles Supplementary governing such matters and
resolutions adopted by the Board of Directors of the Company with respect to
lost, stolen or destroyed securities. The Paying Agent may issue new
certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Company to the Paying Agent to issue a
replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Company to the Paying Agent that such
issuance will comply with provisions of applicable law and the Articles
Supplementary and resolutions of the Company.
4.5 Disposition of Canceled Certificates; Record Retention.
The Paying Agent shall retain share certificates which have been canceled
and any accompanying documentation thereto in accordance with applicable rules
and regulations of the Commission for at least six calendar years from the date
of such cancellation. The Paying Agent, upon written request by the Company,
shall afford to the Company, its agents and counsel access at reasonable times
during normal business hours to review and make extracts or copies (at the
Company's sole cost and expense) of such certificates and accompanying
documentation. Upon the expiration of this six-year period, the Paying Agent,
upon written request by the Company, shall deliver to the Company the canceled
certificates and any accompanying documentation. In the event that the
Commission requests that any or all such records be furnished to it, the Paying
Agent shall provide the Company with prompt written notice of such request so
that the Company may appeal such request and the Paying Agent shall cooperate
with the Company in any such appeal. In the event that such appeal is
unsuccessful, the Paying Agent shall be permitted to furnish to the Commission,
either at its principal office or at any regional office, complete, correct and
current hard copies of any and all records that were requested by the Commission
provided that the Paying Agent shall exercise reasonable efforts to obtain
assurance that confidential treatment will be accorded to such records.
Thereafter, such records shall not be destroyed by the Company without the
approval of the Paying Agent, which approval shall not be withheld unreasonably,
but will be safely stored for possible future reference.
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4.6 Share Register.
The Paying Agent shall maintain the share register, which shall contain a
list of the Holders, the number of MMP Shares held by each Holder and the
address of each Holder. The Paying Agent shall record in the share register any
change of address of a Holder upon notice by such Holder. In case of any written
request or demand for the inspection of the share register or any other books of
the Company in the possession of the Paying Agent, the Paying Agent will notify
the Company and secure instructions as to permitting or refusing such
inspection. The Paying Agent reserves the right, however, to exhibit the share
register or other records to any person in case it is (a) ordered to do so by a
court of competent jurisdiction or a regulatory body, judicial or quasi-judicial
agency or authority having the authority to compel such disclosure or (b)
advised by its counsel that its failure to do so would be unlawful.
4.7 Return of Funds.
Any funds paid to the Paying Agent for the paying of dividends but not
applied to the payment of dividends, including interest earned on such moneys,
will, to the extent permitted by law, be repaid to the Company at the end of 90
days from the date on which such moneys were to have been so applied. Upon
written request, the Company 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 MMP Shares called
for redemption on such date and (ii) such other amounts, if any, to which
Holders of MMP Shares 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 Company upon its written
request whereupon the Company shall assume all responsibility and liability for
compliance with any abandoned or unclaimed property law or regulation. Funds,
while deposited with the Auction Agent, will be held in trust for the payment of
the applicable dividend, redemption price or, as may be applicable under the
Articles Supplementary, other charges.
V. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of the Company.
The Company represents and warrants to the Auction Agent that:
(i) the Company has been duly organized and is validly existing as a
corporation under the laws of the State of Maryland, and has full power to
execute and deliver this Agreement and to authorize, create and issue the
MMP Shares;
(ii) the Company is registered with the Commission under the 1940 Act
as a closed-end, nondiversified, management investment company;
(iii) this Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights
and to general equitable principles;
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(iv) the form of the certificate evidencing the MMP Shares complies
with all applicable state and federal laws;
(v) the MMP Shares have been duly and validly authorized by the
Company and, upon completion of the initial sale of the MMP Shares and
receipt of payment therefor, will be validly issued by the Company, fully
paid and nonassessable;
(vi) at the time of the offering of the MMP Shares, the MMP Shares
offered will be registered under the Securities Act and no further action
by or before any governmental body or authority of the United States or of
any state thereof is required in connection with the execution and delivery
of this Agreement or will be required in connection with the issuance of
the MMP Shares, except such action as required by applicable state
securities laws;
(vii) the execution and delivery of this Agreement and the issuance
and delivery of the MMP Shares do not and will not conflict with, violate
or result in a breach of the terms, conditions or provisions of, or
constitute a default under, the Articles of Incorporation or by-laws of the
Company, any order or decree of any court or public authority having
jurisdiction over the Company or any mortgage, indenture, contract,
agreement or undertaking to which the Company is a party or by which it is
bound the effect of which conflict, violation, breach or default would be
material to the Company; and
(viii) no taxes are payable upon or in respect of the execution of
this Agreement or will be payable upon or in respect of the issuance of the
MMP Shares.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Company that:
(i) the Auction Agent is duly organized and is validly existing as a
banking corporation in good standing under the laws of the State of New
York and has the corporate power to enter into and perform its obligations
under this Agreement; and
(ii) this Agreement has been duly and validly authorized, executed and
delivered by the Auction Agent and constitutes the legal, valid and binding
obligation of the Auction Agent, enforceable against the Auction Agent in
accordance with its terms, subject only to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equitable principles.
VI. THE AUCTION AGENT.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as non-fiduciary agent for the
Company hereunder, has only the duties expressly set forth herein, and owes
no duties, fiduciary or otherwise to any Person by reason of this Agreement
and no implied duties, fiduciary or otherwise, shall be read into this
Agreement against the Auction Agent.
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(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 gross 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.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may rely conclusively upon, and shall be fully
protected in acting or refraining from acting in accordance with, any
communication authorized by this Agreement and any proper written
instruction, notice, request, direction, consent, report, certificate,
share 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
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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.
(h) All the rights, privileges, immunities and protections granted to
the Auction Agent herein are deemed granted to the Paying Agent and the
Auction Agent 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 (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of gross negligence
or bad faith on the part of the Auction Agent, be deemed to be conclusively
proved and established by a certificate describing such action as 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 gross 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 gross negligence.
6.3 Compensation, Expenses and Indemnification.
(a) The Company shall pay to the Auction Agent from time to time
reasonable compensation for all services rendered by it under this
Agreement and under the Broker-Dealer Agreements as shall be set forth in a
separate writing signed by the Company and the Auction Agent, subject to
adjustments if the MMP Shares no longer are held of record
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by the Securities Depository or its nominee or if there shall be such other
change as shall increase or decrease materially the Auction Agent's
obligations hereunder or under the Broker-Dealer Agreements.
(b) The Company shall reimburse the Auction Agent upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Auction Agent in accordance with any provision of this Agreement and of the
Broker-Dealer Agreements (including the reasonable compensation, expenses
and disbursements of its agents and counsel), except any expense,
disbursement or advance attributable to the Auction Agent's gross
negligence or bad faith, upon submission to the Company of reasonable
documentation thereof. In no event shall the Auction Agent be responsible
or liable for special, indirect or consequential loss or damage of any kind
whatsoever (including, but not limited to, loss of profit), even if the
Auction Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(c) The Company shall indemnify the Auction Agent and its officers,
directors, employees and agents for, and hold them harmless against, any
loss, liability or expense incurred without negligence or bad faith on the
part of the Auction Agent arising out of or in connection with its agency
under this Agreement and under the Broker-Dealer Agreements, including the
costs and expenses of defending themselves against any claim of liability
in connection with their exercise or performance of any of their duties
hereunder and thereunder, except such as may result from its gross
negligence or bad faith.
6.4 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or adequacy of
the Agreement, the Broker-Dealer Agreements or the MMP Shares except to the
extent otherwise set forth in Section 5.2 and except that the Auction Agent
hereby represents that the Agreement has been duly authorized, executed and
delivered by the Auction Agent and constitutes a legal and binding obligation of
the Auction Agent.
VII. MISCELLANEOUS.
7.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Company may terminate this
Agreement at any time by so notifying the Auction Agent, provided that, if
any MMP Shares remain outstanding, the Company shall have entered into an
agreement with a successor auction agent. The Auction Agent may terminate
this Agreement upon prior notice to the Company on the date specified in
such notice, which date shall be no earlier than 60 days after delivery of
such notice. If the Auction Agent terminates this Agreement while any MMP
Shares remain outstanding, the Company shall use its best efforts to enter
into an agreement with a successor auction agent containing substantially
the same terms and conditions as this Agreement.
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(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Company and the Auction Agent under
this Agreement shall cease upon termination of this Agreement. The
Company's representations, warranties, covenants and obligations to the
Auction Agent under Section 5.1 hereof shall survive the termination
hereof. The Auction Agent's representations, warranties, covenants and
obligations under Section 5.2 hereof shall survive the termination hereof.
Upon termination of this Agreement, the Auction Agent shall (i) resign as
Auction Agent under the Broker-Dealer Agreements, (ii) at the Company's
written request, deliver promptly to the Company or to another authorized
party copies of all books and records maintained by it in connection with
its duties hereunder, and (iii) at the written request of the Company,
transfer promptly to the Company or to any successor auction agent any
funds deposited by the Company with the Auction Agent (whether in its
capacity as Auction Agent or as Paying Agent) pursuant to this Agreement
which have not been distributed previously by the Auction Agent in
accordance with this Agreement.
7.2 Communications.
Except for (i) communications authorized to be made by telephone pursuant
to this Agreement or the Auction Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be 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 Company, Tortoise Energy Capital Corporation
addressed to: 00000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Auction Agent, The Bank of New York
addressed to: Corporate Trust Department
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Dealing & Trading Group - Auction Desk
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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 the Company by a Company Officer and
on behalf of the Auction Agent by an Authorized Officer.
7.3 Entire Agreement.
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
16
understandings, oral, written or implied, between the parties relating to the
subject matter hereof, except for written agreements relating to the
compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other than
the Company, the Auction Agent and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment; Waiver.
(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 hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any
subsequent breach.
7.6 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by, the respective successors and permitted assigns of each of the
Company and the Auction Agent. This Agreement may not be assigned by either
party hereto absent the prior written consent of the other party, which consent
shall not be withheld unreasonably.
7.7 Severability.
If any clause, provision or section hereof 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 of
the remaining clauses, provisions or sections hereof.
7.8 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.
7.9 Governing Law, Jurisdiction, Waiver of Trial By Jury.
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 AUCTION AGENCY 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.
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EACH PARTY WAIVES ANY OBJECTION THAT IT MAY HAVE THAT SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN THE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, CITY OF
NEW YORK 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.
7.10 Limitation of Liability. A copy of the Articles of Incorporation of
the Company is on file with the Secretary of State of the State of Maryland.
This Agreement has been executed on behalf of the Company by an officer of the
Company in such capacity and not individually and the obligations of the Company
under this Agreement are not binding upon such officer or the shareholders of
the Company individually but are binding only upon the assets and property of
the Company.
[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.
TORTOISE ENERGY CAPITAL CORPORATION
By:
--------------------------------------
Name: Chief Financial Officer
Title: Xxxxx X. Xxxxxxx
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
Title:
19
EXHIBIT A
FORM OF BROKER-DEALER AGREEMENT
20
