UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
Tortoise Power and Energy
Infrastructure Fund, Inc.
(Name of Subject Company (Issuer))
Tortoise Power and Energy
Infrastructure Fund, Inc.
(Name of Filing Person(s) (Issuer))
SHARES OF COMMON STOCK
(Title of Class of Securities)
89147X104
(CUSIP Number of Class of Securities)
Tortoise Capital Advisors, L.L.C.
6363 College Boulevard, Suite 100A
Overland Park, Kansas 66211
913-981-1020
(Name, Address, and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Filing Person(s))
With a copy to:
Steven F. Carman, Esq.
Husch Blackwell LLP
4801 Main Street, Suite 1000
Kansas City, Missouri 64112
October 3, 2022
(Date Tender Offer First Published, Sent or Given to Security Holders)

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the statement relates:

third-party tender offer subject to Rule 14d-1.

issuer tender offer subject to Rule 13e-4.

going-private transaction subject to Rule 13e-3.

amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results of the tender offer: ☐

 
ITEMS 1 THROUGH 9 and ITEM 11
This Issuer Tender Offer Statement on Schedule TO relates to an offer by Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Fund”), to purchase for cash up to 5% of its outstanding shares of common stock (the “Offer”), for cash at a price per share equal to 98% of the Fund’s net asset value per share as of the close of regular trading session on the New York Stock Exchange (“NYSE”) on November 1, 2022 (or if the Offer is extended, on the day to which the Offer is extended), upon the terms and subject to the conditions contained in the Offer to Purchase dated October 3, 2022 and the related Letter of Transmittal, which are filed as exhibits to this Schedule TO. The information set forth in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference with respect to Items 1 through 9 and Item 11 of this Schedule TO.
ITEM 10.   FINANCIAL STATEMENTS
Not applicable.
ITEM 12.   EXHIBITS
(a)(1)(i) Letter to Shareholders from the Chief Executive Officer of the Fund and Offer to Purchase.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(iv) Letter to Clients and Client Instruction Form.
(a)(1)(v) Notice of Guaranteed Delivery.
(a)(1)(vi) Not applicable.
(a)(2) Not applicable.
(a)(3) Not applicable.
(a)(4) Not applicable.
(a)(5)(i) Press Release dated August 23, 2022.(1)
(a)(5)(ii) Press Release dated October 3, 2022.
(b)(1)(i) Credit Agreement with the Bank of Nova Scotia.
(b)(1)(ii) First Amendment to the Bank of Nova Scotia Credit Agreement.
(b)(1)(iii) Second Amendment to the Bank of Nova Scotia Credit Agreement.
(b)(1)(iv) Third Amendment to the Bank of Nova Scotia Credit Agreement.
(b)(1)(v) Fourth Amendment to the Bank of Nova Scotia Credit Agreement.
(d)(1) Depositary and Information Agent Agreement between the Fund and Computershare Trust Company, N.A., Computershare, Inc. and Georgeson LLC.
(g) Not applicable.
(h) Not applicable.
107 Calculation of Filing Fees
(1)
Previously filed on Schedule TO-C via EDGAR on August 23, 2022.
 
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Tortoise Power and Energy Infrastructure Fund, Inc.
By:
[MISSING IMAGE: sg_bradleyadams-bw.jpg]
Name: P. Bradley Adams
Title:    Chief Executive Officer
October 3, 2022
 
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EXHIBIT INDEX
EXHIBIT
DESCRIPTION
(a)(1)(i)
(a)(1)(ii)
(a)(l)(iii)
(a)(1)(iv)
(a)(1)(v)
(a)(5)(i)
(a)(5)(ii)
(b)(1)(i)
(b)(1)(ii)
(b)(l)(iii)
(b)(1)(iv)
(b)(1)(v)
(d)(1)
107
 
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 Exhibit (a)(1)(i)
TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
6363 COLLEGE BOULEVARD, SUITE 100A
OVERLAND PARK, KANSAS
66211
October 3, 2022
Dear Stockholder:
The Fund is hereby commencing its purchase offer under which the Fund is offering to purchase up to 5% of the Fund’s outstanding shares. The offer to purchase is for cash at a price equal to 98% of the Fund’s net asset value as of the close of regular trading on the New York Stock Exchange on November 1, 2022 or such later date to which the offer to purchase is extended, the Expiration Date, upon the terms and conditions set forth in the Offer to Purchase and the related Letter of Transmittal (which together constitute the “Offer”). If you are not interested in selling any of your shares at this time, you do not need to do anything.
The deadline for participating in the Offer is the Expiration Date. Stockholders who choose to participate in the Offer can expect to receive payment for the shares repurchased on or about November 8, 2022, if the Offer is not extended beyond November 1, 2022.
The Fund’s common stock has at times traded at a premium to the Fund’s net asset value per share. It may not be in a stockholder’s interest to tender shares in connection with the Offer if the Fund’s common stock is trading at a premium. The market price of the Fund’s common stock can and does fluctuate. Accordingly, on the Expiration Date, the market price of the Fund’s common stock may be above or below the Fund’s net asset value per share.
As of September 23, 2022, the Fund’s net asset value per share was $14.32, and 6,526,499.30 shares were issued and outstanding. The Fund computes its net asset value on a daily basis. The Fund’s net asset value and the closing price of the Fund’s common stock on the New York Stock Exchange may be obtained from our website at https://cef.tortoiseecofin.com/ or by contacting Georgeson LLC, the Fund’s Information Agent, toll free at 1-877-668-1646.
Neither the Fund, the Investment Manager nor the Fund’s Board of Directors is making any recommendation to any stockholder whether to tender or refrain from tendering shares in the Offer. The Fund and the Board of Directors urge each stockholder to read and evaluate the Offer and related materials carefully and make his or her own decision. Questions, requests for assistance and requests for additional copies of this Offer to Purchase and related materials should be directed to Georgeson LLC toll free at 1-877-668-1646.
Sincerely,
[MISSING IMAGE: sg_bradleyadams-bw.jpg]
P. BRADLEY ADAMS
Chief Executive Officer
TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
 

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OFFER TO PURCHASE
OFFER BY
TORTOISE POWER AND
ENERGY INFRASTRUCTURE
FUND, INC.
TO PURCHASE UP TO 5%
OF ITS ISSUED AND OUTSTANDING
SHARES OF COMMON STOCK
THIS OFFER TO PURCHASE WILL EXPIRE ON NOVEMBER 1, 2022
AT 5:00 P.M., NEW YORK CITY TIME UNLESS THE OFFER TO PURCHASE IS
EXTENDED
THIS OFFER TO PURCHASE AND THE ACCOMPANYING LETTER OF TRANSMITTAL (WHICH TOGETHER CONSTITUTE THE “OFFER”) ARE NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT ARE SUBJECT TO OTHER CONDITIONS AS OUTLINED HEREIN AND IN THE LETTER OF TRANSMITTAL.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN AND IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
October 3, 2022
 

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SUMMARY TERM SHEET
SECURITIES SOUGHT: Up to 5% of the outstanding shares of common stock of the Fund
PRICE OFFERED PER SHARE: 98% of the net asset value (“NAV”) of the shares of the Fund’s common stock
SCHEDULED EXPIRATION TIME & DATE:
November 1, 2022 at 5:00 PM New York City Time
PURCHASER: Tortoise Power and Energy Infrastructure Fund, Inc.
This Summary Term Sheet highlights certain information in this Offer to Purchase for a Stockholder (as defined herein). To understand the Offer (as defined herein) fully and for a more complete description of the terms of the Offer, please read carefully the entire Offer to Purchase and the related Letter of Transmittal (which together constitute the “Offer”) in their entirety because the information in this summary term sheet is not complete and additional important information is contained in the Offer.
What and how many securities is Tortoise Power and Energy Infrastructure Fund, Inc. (the “Fund”) offering to purchase?
The Board of Directors of the Fund has authorized the Fund to conduct a cash tender offer to purchase up to 5% or 326,324 (the “Offer Amount”) of its outstanding shares of common stock (“Shares”). If the number of Shares properly tendered and not withdrawn prior to the date and time the Offer expires is less than or equal to the Offer Amount, the Fund will, upon the terms and subject to the conditions of the Offer, purchase all Shares tendered. If more Shares than the Offer Amount are properly tendered and not withdrawn prior to the date the Offer expires, the Fund will purchase the Offer Amount on a pro rata basis. Shareholders cannot be assured that all of their tendered Shares will be repurchased. For more information see Section 1, “Number of Shares,” Section 2, “Price” and Section 14, “Extension of Tender Period; Termination; Amendments.”
How much and in what form will the Fund pay me for my Shares?
The Fund will pay cash for Shares purchased pursuant to the Offer, less any applicable withholding taxes. The purchase price will equal 98% of the NAV per Share as of the close of regular trading on the New York Stock Exchange (“NYSE”) as of the day the Offer expires (or if the Offer is extended, on the date to which the Offer is extended), upon the terms and subject to the conditions set forth in the Offer.
The Shares are traded on the NYSE under the ticker symbol “TPZ.” As of September 23, 2022, the closing price as of the close of the regular trading session of the NYSE was $12.33 per Share. The Fund normally calculates the NAV of its Shares daily at the close of regular trading on the NYSE. On September 23, 2022, the NAV was $14.32. During the pendency of the Offer, current NAV quotations can be obtained from our website at https://cef.tortoiseecofin.com/ or from Georgeson LLC, the information agent for the Offer (“Information Agent”) at 1-877-668-1646. For more information see Section 2, “Price” and Section 7, “Acceptance for Payment and Payment.”
When does the Offer expire? Can the Fund extend the Offer, and if so, when will the Fund announce the extension?

The Offer expires on November 1, 2022 at 5:00 p.m., New York City Time, unless the Fund extends the Offer. The later of November 1, 2022 and the latest time or date to which the Offer is extended is hereinafter called the “Expiration Date.”

The Fund may extend the Offer period at any time. If it does, the Fund will determine the purchase price as of the close of regular trading on the NYSE as of the new Expiration Date.

If the Offer period is extended, the Fund will make a public announcement of the extension no later than 9:00 a.m. New York City Time on the next business day following the previously scheduled Expiration Date.
If you hold your Shares directly, you have until the Expiration Date to decide whether to tender your Shares in the Offer. If you want to tender your Shares, but your certificates for the Shares are not immediately
 
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available or cannot be delivered to the Depositary, you cannot comply with the procedure for book-entry transfer or you cannot deliver the other required documents to the Depositary by the Expiration Date of the Offer, you will not be able to tender your Shares. This can occur, for example, if you purchased Shares at, or within one or two days of, the Expiration Date, not allowing sufficient time for such purchase transaction to settle. There are guaranteed delivery procedures available under the terms of the Offer as an alternative delivery mechanism. If you hold your Shares through a nominee holder, such as a broker, dealer, commercial bank, trust company or other nominee (“Nominee Holder”), you should consult your broker or other Nominee Holder to determine if there is an earlier deadline by which you must inform such Nominee Holder of any decision to tender your Shares and provide to such Nominee Holder any other required materials. For more information see Section 5, “Procedure for Tendering Shares” and Section 14, “Extension of Tender Period; Termination; Amendments.”
What if more than 5% of the outstanding Shares are tendered (and not timely withdrawn)?
The Fund will purchase duly tendered Shares from tendering stockholders pursuant to the terms and conditions of the Offer on a pro rata basis (disregarding fractions) in accordance with the number of Shares tendered by each Stockholder (and not properly withdrawn), unless the Fund determines not to purchase any Shares in the event that the conditions described in Section 8 of this Offer to Purchase are present. The Fund’s present intention, if the Offer is oversubscribed, is not to purchase more than 5% of the outstanding Shares. For more information see Section 1, “Number of Shares.”
Must I tender all of my Shares for repurchase?
No. You may tender for repurchase all or part of the Shares you own.
Will I have to pay any fees or commissions on Shares I tender?
No fees or commissions will be payable to the Fund in connection with the Offer. However, brokers, dealers, or other persons may charge Shareholders a fee for submitting tenders into the Offer. Shareholders may be obligated to pay transfer taxes on the purchase of Shares by the Fund and other transaction costs. Please contact your bank, broker, or nominee for more details. For more information see Section 2, “Price,” Section 7, “Acceptance for Payment and Payment” and Section 12, “Certain Fees and Expenses.”
How will the Fund pay for the Offer? / Does the Fund have the financial resources to pay me for my Shares?
Yes. Funds obtained from cash, liquid securities in the Fund’s investment portfolio or borrowings will be used to finance the purchase of any tendered shares. For more information see Section 4, “Effect of the Offer; Source and Amount of Funds.”
If Shares I tender are accepted by the Fund, when will payment be made?
Payment for tendered Shares, if accepted, will be made promptly after the termination date of the Offer.
How do I tender my Shares?
If your Shares are registered in the name of a Nominee Holder, you should contact that firm if you wish to tender your Shares.
All other Shareholders wishing to participate in the Offer must, prior to the date and time the Offer expires, complete and execute a Letter of Transmittal, together with any required signature guarantees, and any other documents required by the Letter of Transmittal. You must send these materials to the Depositary at its address set forth on the last page of this Offer to Purchase. If you hold certificates for Shares, you must send the certificates to the Depositary at its address set forth on the last page of this Offer to Purchase. If your Shares are held in book-entry form, you must comply with the book-entry delivery procedure set forth in Section 5 of this Offer to Purchase. In all these cases, the Depositary must receive these materials prior to the date and time the Offer expires.
 
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The Fund’s transfer agent holds Shares in uncertificated form for certain Shareholders pursuant to the Fund’s dividend reinvestment and cash purchase plan. When a Shareholder tenders share certificates, the Depositary will accept any of the Shareholder’s uncertificated Shares for tender first, and accept the balance of tendered Shares from the Shareholder’s certificated Shares. For more information see Section 5, “Procedure for Tendering Shares.”
Until what time can I withdraw tendered Shares?
You may withdraw your tendered Shares at any time prior to the Expiration Date, and if the Shares have not by then been accepted for payment by the Fund, at any time after December 1, 2022. Otherwise, after the Expiration Date, tenders made pursuant to the Offer will be irrevocable.
Withdrawals of tenders of Shares may not be rescinded, and any Shares validly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures described in Section 5 of this Offer to Purchase at any time before the Expiration Date. For more information see Section 6, “Withdrawal or Modification of Tender of Shares for Purchase.”
How do I withdraw tendered Shares?
If you desire to withdraw tendered Shares, you should either:

Give proper written notice to the Depositary; or

If your Shares are held of record in the name of a Nominee Holder, contact that firm to withdraw your tendered Shares.
For more information see Section 6, “Withdrawal or Modification of Tender of Shares for Purchase.”
What are the tax consequences of tendering Common Shares?
The receipt of cash for Shares pursuant to the Offer by a U.S. shareholder other than a Shareholder exempt from tax or investing through a tax-advantaged arrangement generally will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local, foreign and other tax laws. For U.S. federal income tax purposes, the sale of your Shares for cash generally will be treated either as (1) a sale or exchange of the Shares, or (2) a distribution with respect to the Shares that is treated in whole or in part as taxable dividend. Each Shareholder should consult its tax adviser as to the tax consequences of tendering its Common Shares in the Offer. For more information see Section 15, “Certain Federal Income Tax Consequences.”
What is the purpose of the Offer?
The Offer will permit tendering Stockholders to liquidate at least a portion of their Shares at approximately 98% of NAV, while preserving the Fund as an investment vehicle for total return for the remaining non-tendering Stockholders. In approving the Offer, the Board of Directors (“Board”) of the Fund considered a number of factors, including: the economic condition of the investment markets; that the Offer could provide an opportunity for Stockholders to achieve partial liquidity at close to NAV; that the Offer could enable Stockholders to tender a portion of their Shares at a price that is greater than what they could realize in the secondary market at that time; that the Offer is expected to have an accretive impact to NAV for Stockholders who remain invested in the Fund; that the Offer may assist in narrowing the discount to NAV at which the Shares trade; and that the Tortoise Capital Advisors, L.L.C. (the “Investment Manager”) recommended the Offer to the Board.
After considering the totality of the factors listed in this paragraph and other factors, none of which standing on its own was dispositive, the Board determined to authorize this Offer. There is no guarantee that the Offer will be accretive to the Fund’s NAV. There can be no assurance that this Offer will have the effect of narrowing the discount or that any reduction in the discount will be sustained following the expiration of the Offer.
 
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Please bear in mind that none of the Fund, its Board, nor the Investment Manager has made any recommendation as to whether or not you should tender your Shares. Stockholders are urged to consult their own investment and tax advisers and make their own decisions whether to tender any Shares and, if so, how many Shares to tender. For more information see Section 3, “Purpose of the Offer.”
What are the most significant conditions of the Offer?
The Fund will not accept Shares tendered for payment under any one of the following circumstances that, in the view of the Board, would make it inadvisable to proceed with the Offer, purchase or payment. The following is only a summary of the conditions. For a complete list of the conditions of the Offer, please see Section 8, “Certain Conditions of the Offer.”

The Fund would be unable to sell portfolio securities in an orderly manner or such sale would have an adverse effect on the NAV of the Fund to the detriment of those Stockholders who do not tender their Shares.

The offer could impair compliance with U.S. Securities and Exchange Commission or Internal Revenue Service requirements.

Trading generally or prices on the NYSE or National Association of Securities Dealers Automated Quotation System are suspended or limited.

The purchase of Shares in the offer would result in the delisting of the Shares from the NYSE.

In the Board’s judgment, there is a material legal action or proceeding instituted or threatened, challenging the offer or otherwise potentially materially adversely affecting the Fund.

Certain circumstances exist beyond the Fund’s control, including limitations imposed by federal or state authorities on the extension of credit by lenders or where banks have suspended payment.

In the Board’s judgment, the Fund or its Stockholders might be adversely affected if Shares were purchased in the offer.

The Board determines that the purchase of Shares might be a breach of its fiduciary duty.
If I decide not to tender, how will the Offer affect my Shares?
If you do not tender your Shares (or if you own Shares following completion of the Offer), your percentage ownership interest in the Fund will increase after the completion of the Offer and you will be subject to any increased risks associated with the reduction in the Fund’s total assets due to the payment for the tendered Shares. These risks may include greater volatility due to a decreased asset base and proportionately higher expenses, as well as the possibility of receiving additional taxable capital gains on the distributions from the sale of portfolio securities to pay for tendered Shares. The reduced assets of the Fund as a result of the Offer may result in less investment flexibility for the Fund, depending on the number of Shares repurchased and may have an adverse effect on the Fund’s expense ratio and investment performance. For more information see Section 4, “Effect of the Offer; Source and Amount of Funds” and Section 12, “Certain Fees and Expenses.”
What action need I take if I decide not to tender my Shares?
None.
Whom do I contact if I have questions about the Offer?
If you own Shares through a broker or other Nominee Holder, you can call your broker or other Nominee Holder. You can also contact Georgeson LLC, the Information Agent, at 1-877-668-1646, Monday through Friday, 9 a.m. to 5 p.m., New York City Time.
 
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To the Stockholders of Tortoise Power and Energy Infrastructure Fund, Inc.:
1. Number of Shares.   Tortoise Power and Energy Infrastructure Fund, Inc. (the “Fund”), a Maryland corporation registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a closed-end, non-diversified management investment company, hereby offers to purchase up to 5% of the issued and outstanding shares of common stock in the Fund (the “Shares”) as of October 3, 2022 (the “Offer Amount”), which are tendered and not withdrawn prior to 5:00 p.m., New York City Time, on November 1, 2022 or such later date to which the Offer is extended (the “Expiration Date”).
This Offer is being made to all stockholders of the Fund (“Stockholders”) and is not conditioned upon any minimum number of Shares being tendered. NEITHER THE FUND, ITS BOARD OF DIRECTORS (THE “BOARD”) NOR THE INVESTMENT MANAGER IS MAKING ANY RECOMMENDATION TO ANY STOCKHOLDER WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES IN THE OFFER. The Fund and the Board urge each Stockholder to read and evaluate the Offer and related materials carefully and make his or her own decision.
If the number of Shares properly tendered and not withdrawn prior to the Expiration Date is less than or equal to the Offer Amount, the Fund will, upon the terms and conditions of the Offer, purchase all Shares so tendered. If more Shares than the Offer Amount are duly tendered and not withdrawn prior to the Expiration Date, the Fund will purchase the Offer Amount of Shares on a pro rata basis.
As of September 23, 2022, 6,526,499.30 Shares were issued and outstanding. The Fund does not anticipate that the number of Shares as of the Expiration Date will be materially different.
2. Price.   The offer is to purchase Shares in exchange for cash at a price equal to ninety eight percent (98%) of the net asset value (“NAV”) per Share (the “Purchase Price”) determined as of the close of the regular trading session of the New York Stock Exchange (the “NYSE”) on the Expiration Date.
On the Expiration Date, the market price of the Shares may be above or below the Fund’s NAV per Share.
Stockholders can obtain the daily NAV of the Shares and daily NYSE closing price of the Shares on our website at https://cef.tortoiseecofin.com/ or by calling Georgeson LLC toll free at 1-877-668-1646.
The Shares are listed on the NYSE under the symbol “TPZ.” On September 23, 2022, the closing price on the NYSE was $12.33 per Share.
3. Purpose of the Offer.   As with many closed-end investment companies, the trading price of the Shares on the NYSE has historically been at a discount to, i.e., lower than, the NAV of the Shares. The Offer will permit tendering Stockholders to liquidate at least a portion of their Shares at approximately 98% of NAV, while preserving the Fund as an investment vehicle for total return for the remaining non-tendering Stockholders. In approving the Offer, the Board of Directors (“Board”) of the Fund considered a number of factors, including: the economic condition of the investment markets; that the Offer could provide an opportunity for Stockholders to achieve partial liquidity at close to NAV; that the Offer could enable Stockholders to tender a portion of their Shares at a price that is greater than what they could realize in the secondary market at that time; that the Offer is expected to have an accretive impact to NAV for Stockholders who remain invested in the Fund; that the Offer may assist in narrowing the discount to NAV at which the Shares trade; and that the Investment Manager recommended the Offer to the Board.
After considering the totality of the factors listed in this paragraph and other factors, none of which standing on its own was dispositive, the Board determined to authorize this Offer. There is no guarantee that the Offer will be accretive to the Fund’s NAV.
There can be no assurance, however, that this Offer will have the effect of narrowing the discount or that any reduction in the discount will be sustained following the expiration of the Offer. Any Shares acquired by the Fund pursuant to the Offer will become authorized but unissued Shares and will be available for issuance by the Fund without further Stockholder action (except as required by applicable law or the rules of national securities exchanges on which the Shares are listed).
NONE OF THE FUND, ITS BOARD OR THE INVESTMENT MANAGER MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER ANY OR ALL
 
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OF SUCH STOCKHOLDER’S SHARES. STOCKHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS, AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
4. Effect of the Offer; Source and Amount of Funds.   The actual cost to the Fund of the Offer cannot be determined at this time because the number of Shares to be purchased will depend on the number tendered, and the price will be based on the NAV per Share on the Expiration Date. If the NAV per Share on the Expiration Date is the same as the NAV per Share on September 23, 2022 ($14.32 per Share), and if 5% of the outstanding Shares are purchased pursuant to the Offer, the cost to the Fund (excluding expenses) would be approximately $4,579,514.03.
The monies to be used by the Fund to purchase Shares pursuant to the Offer will be obtained from cash, liquid securities in the Fund’s investment portfolio or borrowings on the credit facility.
The Fund is a party to a credit agreement (the “Credit Agreement”) with The Bank of Nova Scotia to borrow up to a limit of $30 million pursuant to a 364-day secured revolving line of credit. Interest is charged at a spread above the London Interbank Offered Rate and is payable quarterly. The Fund is required to maintain certain net asset levels during the term of the Credit Agreement.
The Offer may have certain adverse consequences for tendering and non-tendering Stockholders:
Effect on NAV and Consideration Received by Tendering Stockholders.   To pay the aggregate purchase price of Shares accepted for payment pursuant to the Offer, the Fund anticipates that funds will be first derived from any cash on hand and then from the proceeds from the sale of portfolio securities held by the Fund or from the Fund’s credit arrangements. If the Fund is required to sell a substantial amount of portfolio securities to raise cash to finance the Offer, the over-supply of portfolio securities for sale could cause market prices of the Fund’s portfolio securities, and hence the Fund’s NAV, to decline. If such a decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. Because the price per Share to be paid in the Offer will be dependent upon the NAV as determined on the Expiration Date, if such a decline continued to the Expiration Date, the consideration received by tendering Stockholders would be less than it otherwise might be. In addition, a sale of portfolio securities will cause increased transaction expenses, and the Fund may receive proceeds from the sale of portfolio securities that are less than the valuations of such securities by the Fund. Accordingly, because of the Offer, the NAV per Share may decline more than it otherwise might, thereby reducing the amount of proceeds received by tendering Stockholders, and also reducing the NAV for non-tendering Stockholders. However, because the Offer price is for 98% of the NAV of the Shares, the purchase of Shares tendered in and of itself would be somewhat accretive to the NAV of Shares outstanding following completion of the Offer.
The Fund may sell portfolio securities during the pendency of the Offer to raise cash for the purchase of Shares. Thus, it is likely that during the pendency of the Offer, and possibly for a short time thereafter, the Fund will hold a greater than normal percentage of its net assets in cash and cash equivalents. This larger cash position may interfere with the Fund’s ability to meet its investment objective. The Fund is required by law to pay for tendered Shares it accepts for payment promptly after the Expiration Date of this Offer. Because the Fund will not know the number of Shares tendered, or the NAV on which the tender price is based, until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. If on or prior to the Expiration Date the Fund does not have, or believes it is unlikely to have, sufficient cash to pay for all Shares tendered, it may extend the Offer to allow additional time to sell portfolio securities or increase its borrowing under its current credit arrangement to raise sufficient cash.
Possible Proration:   If greater than 5% of the Fund’s Shares are tendered pursuant to the Offer, the Fund would be required to purchase Shares tendered on a pro rata basis, subject to certain exceptions described in Section 1, “Number of Shares.” Accordingly, Stockholders cannot be assured that all of their tendered Shares will be purchased.
Recognition of Capital Gains:   As noted, the Fund may be required to sell portfolio securities pursuant to the Offer, in which event it might recognize capital gains. The Fund expects that it would distribute any
 
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such gains to Stockholders (reduced by net capital losses realized during the fiscal year, if any) following the end of its fiscal year on November 30. This recognition and distribution of gains, if any, would have two negative consequences: first, Stockholders at the time of declaration of the distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; and second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities, thereby possibly realizing and recognizing additional capital gains. It is impossible to predict the amount of capital gains or losses that would be realized and recognized. In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the Stockholders at ordinary income rates.
Tax Consequences of Purchases to Stockholders:   The Fund’s purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering Stockholders and may have tax consequences for non-tendering Stockholders. See Section 15, “Certain Federal Income Tax Consequences,” below.
Effect on Remaining Stockholders, Higher Expense Ratio and Less Investment Flexibility:   The purchase of Shares by the Fund pursuant to the Offer will have the effect of increasing the proportionate interest in the Fund of non-tendering Stockholders. All Stockholders remaining after the Offer will be subject to any increased risks associated with the reduction in the Fund’s aggregate assets resulting from payment for the tendered Shares, such as greater volatility due to decreased diversification, potentially greater exposure to leverage, and proportionately higher expenses. The reduced net assets of the Fund as a result of the Offer may result in less investment flexibility for the Fund, depending on the number of Shares purchased, and may have an adverse effect on the Fund’s investment performance.
5. Procedure for Tendering Shares.   Stockholders may tender some or all of their Shares by delivering or mailing a Letter of Transmittal or facsimile thereof (together with certificates and other required documents) to the Depositary at the appropriate address set forth at the end of this Offer or by following the procedures for book-entry delivery set forth below (and causing a confirmation of receipt of such delivery to be received by the Depositary). In lieu of the foregoing, tendering Stockholders can comply with the guaranteed delivery procedures set forth below.
To tender Shares properly, the certificates for Shares, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other documents required by the Letter of Transmittal, must be received prior to the Expiration Date by the Depositary at the appropriate address set forth at the end of this Offer, except as otherwise provided below in this Section. Letters of Transmittal and certificates representing tendered Shares should NOT be sent or delivered directly to the Fund. Stockholders having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee should contact such firm if they desire to tender their Shares.
Signatures on all Letters of Transmittal must be guaranteed by a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc. or a commercial bank or trust company having an office, branch or agency in the United States (each being hereinafter referred to as an “Eligible Institution”), except in cases where Shares are tendered (i) by a registered holder of Shares who has not completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (ii) for the account of an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If the certificates are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made to a person other than the registered owner of the certificates surrendered, then the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates, with the signature(s) on the certificates or stock powers guaranteed as aforesaid. See Instruction 6 of the Letter of Transmittal.
The Fund’s transfer agent holds Shares in uncertificated form for certain Stockholders pursuant to the Fund’s dividend reinvestment plan. Stockholders may tender all such uncertificated Shares by completing the appropriate section in the Letter of Transmittal or Notice of Guaranteed Delivery. There may be tax consequences to a tendering Stockholder who tenders less than all Shares he or she owns. See Section 15, “Certain Federal Income Tax Consequences,” below.
The Depositary will establish accounts with respect to the Shares at the Depository Trust Company (“DTC”) for purposes of the Offer within two business days after the date of this Offer to Purchase. Any
 
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financial institution that is a participant in DTC’s system may make delivery of tendered Shares by causing DTC to transfer such Shares into the Depositary’s account in accordance with DTC’s procedure for such transfer. However, although delivery of Shares may be effected through transfer into the Depositary’s account at DTC, the Letter of Transmittal (or facsimile thereof), with any required signature guarantee and any other required documents, must, in any case, be transmitted to and received by the Depositary at the appropriate address set forth at the end of this Offer to Purchase before the Expiration Date, or the tendering Stockholder must comply with the guaranteed delivery procedure described below. Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Depositary.
If certificates for Shares are not immediately available or time will not permit the Letter of Transmittal and other required documents to reach the Depositary prior to the Expiration Date, Shares may nevertheless be tendered provided that all of the following conditions are satisfied:
(a)   such tenders are made by or through an Eligible Institution; and
(b)   the Depositary receives, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery substantially in the form provided by the Fund (delivered either by mail or email); and
(c)   the certificates for all tendered Shares, or book-entry confirmation, as the case may be, together with a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal, are received by the Depositary within two NYSE trading days after receipt by the Depositary of such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THE CERTIFICATES REPRESENTING SHARES, LETTER OF TRANSMITTAL, AND ANY OTHER DOCUMENTS IS AT THE OPTION AND RISK OF THE STOCKHOLDER. IF THE STOCKHOLDER WISHES TO DELIVER BY MAIL, WE RECOMMEND THE USE OF INSURED REGISTERED MAIL, RETURN RECEIPT REQUESTED. THE STOCKHOLDER HAS THE RESPONSIBILITY TO CAUSE THE CERTIFICATES, LETTER OF TRANSMITTAL AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED.
TO PREVENT BACKUP WITHHOLDING ON PAYMENTS MADE FOR THE PURCHASE OF SHARES PURSUANT TO THE OFFER, EACH INDIVIDUAL STOCKHOLDER (AND CERTAIN OTHER NONCORPORATE STOCKHOLDERS) MUST PROVIDE THE DEPOSITARY WITH HIS CORRECT TAXPAYER IDENTIFICATION NUMBER BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL (EVEN IF SUCH STOCKHOLDER HAS PREVIOUSLY COMPLETED SUCH A FORM). CERTAIN STOCKHOLDERS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES MAY SATISFY THIS REQUIREMENT BY PROVIDING A CERTIFICATE OF FOREIGN STATUS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-8BEN) TO THE DEPOSITARY IN LIEU OF THE SUBSTITUTE FORM W-9. SEE SECTION 15, “CERTAIN FEDERAL INCOME TAX CONSEQUENCES,” BELOW AND INSTRUCTION 11 OF THE LETTER OF TRANSMITTAL.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any Shares tendered will be determined by the Fund, which determination shall be final and binding. The Fund reserves the absolute right (i) to reject any and all tenders not in proper form or the payment for which would, in the opinion of the Fund’s counsel, be unlawful and (ii) to waive any of the conditions of the Offer or any defect or irregularity in the tender of any Shares. The Fund’s determination of any defect or irregularity in the tender of any Shares and its interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the Instructions thereto) will be final. None of the Fund, the Information Agent, the Depositary or any other person shall be under any duty to give notification of any defects or irregularities in tenders, and none shall incur any liability for failure to give such notification.
6. Withdrawal or Modification of Tender of Shares for Purchase.   Shares tendered pursuant to the Offer may be withdrawn or you may change the number of Shares tendered for purchase at any time prior to the Expiration Date, and if the Shares have not by then been accepted for payment by the Fund, at any time after December 1, 2022. After the Expiration Date, tenders made pursuant to the Offer will be irrevocable.
 
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To be effective, a written or emailed notice of withdrawal or notice of modification, as applicable, must be timely received by the Depositary. Such notice must specify the name of the person who executed the particular Letter of Transmittal or Notice of Guaranteed Delivery, the number of Shares to be withdrawn or the modified number of Shares to be tendered and, if certificates have been delivered or otherwise identified to the Depositary, the name of the holder of record and the serial numbers of the certificates representing such Shares. If Shares have been delivered pursuant to the procedure for book- entry delivery as set forth in Section 5, “Procedure for Tendering Shares,” any notice of withdrawal or notice of modification, as applicable, also must specify the name and the number of the account at DTC to be debited or credited with such Shares (which must be the same name and number from which the Shares were tendered), and must otherwise comply with DTC’s procedures.
All questions as to the form and validity, including time of receipt, of notices of withdrawal or notices of modification, as applicable, will be determined by the Fund, in its sole discretion, whose determination will be final and binding. None of the Fund, the Information Agent, the Depositary or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or notice of modification, as applicable, or to incur any liability for failure to give any such notification. Any Shares timely and properly withdrawn will be deemed not duly tendered for purposes of the Offer.
7. Acceptance for Payment and Payment.   Upon the terms and subject to the conditions of the Offer, the Fund will accept for payment, and will pay for, Shares validly tendered on or before the Expiration Date and not properly withdrawn in accordance with Section 6, “Withdrawal or Modification of Tender of Shares for Purchase,” as soon as practicable after the Expiration Date. The Fund expressly reserves the right, in its sole discretion, to delay the acceptance for payment of, or payment for, Shares, in order to comply in whole or in part with any applicable law.
The per-Share consideration paid to any Stockholder pursuant to the Offer will be the highest per-Share consideration paid to any other Stockholder during the Offer. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for such shares (or confirmation of the book-entry transfer of such shares), a properly executed Letter of Transmittal (or facsimile thereof) and any other documents required by the Letter of Transmittal.
For purposes of the Offer, the Fund will be deemed to have accepted for payment, and thereby purchased, Shares properly tendered to the Fund and not withdrawn, if, as and when the Fund gives oral or written notice to the Depositary of its acceptance for payment of such Shares. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price with the Depositary, which will act as agent for the tendering Stockholders for purposes of receiving payment from the Fund and transmitting payment to the tendering Stockholders. Under no circumstances will the Fund pay interest on the purchase price of the Shares to be paid by the Fund, regardless of any delay in making such payment. If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or are not paid for because of an invalid tender, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned, without expense to the tendering Stockholder, as soon as practicable following expiration or withdrawal of the Offer. Shares delivered by book-entry transfer into the Depositary’s account at DTC as described in Section 5, “Procedure for Tendering Shares,” which are to be returned will be credited to an account maintained within DTC. Shares which are to be returned and which were held in uncertificated form by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment plan will be returned to the dividend reinvestment plan account maintained by the transfer agent.
If the Fund is delayed in its acceptance for payment of, or in its payment for, Shares, or is unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Fund’s rights under this Offer, the Depositary may, nevertheless, on behalf of the Fund, retain tendered Shares, and such shares may not be withdrawn unless and except to the extent tendering Stockholders are entitled to withdrawal rights as described in Section 6, “Withdrawal or Modification of Tender of Shares for Purchase.”
Tendering Stockholders will not be obligated to pay brokerage commissions, fees or, except in the circumstances described in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Fund.
 
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8. Certain Conditions of the Offer.   Notwithstanding any other provision of the Offer, the Fund will not accept tenders or effect purchases if: (1) such transactions, if consummated, would (a) result in delisting of the Fund’s Shares from the NYSE (the NYSE Listed Company Manual provides that the NYSE would promptly initiate suspension and delisting procedures with respect to closed-end funds if the total market value of publicly held shares and net assets of the entity over 60 consecutive calendar days are each below $5,000,000. In addition the NYSE would normally give consideration to the prompt initiation of suspension and delisting procedures with respect to the common stock of a closed-end fund if: (i) the number of shares publicly held is less than 200,000; (ii) the total number of public stockholders is less than 300; or (iii) the total market value of shares publicly held is less than $1,000,000 for more than 90 calendar consecutive days.); (b) impair the Fund’s status as a regulated investment company under the Code (which would make the Fund subject to U.S. federal income taxes on all of its income and gains in addition to the taxation of Stockholders who receive distributions from the Fund); or (c) result in a failure to comply with the applicable asset coverage requirements in the event any senior securities are issued and outstanding; (2) the amount of Shares tendered would require liquidation of such a substantial portion of the Fund’s portfolio securities that the Fund would not be able to liquidate portfolio securities in an orderly manner in light of the existing market conditions and such liquidation would have an adverse effect on the NAV of the Fund to the detriment of non-tendering Stockholders; (3) there is any (a) in the Board’s’ judgment, material legal action or proceeding instituted or threatened challenging such transactions or otherwise materially adversely affecting the Fund; (b) suspension of or limitation on prices for trading securities generally on the NYSE or other national securities exchange(s), or the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) National Market System; (c) declaration of a banking moratorium by Federal or state authorities or any suspension of payment by banks in the United States or New York State; (d) limitation affecting the Fund or the issuers of its portfolio securities imposed by federal or state authorities on the extension of credit by lending institutions; (e) commencement of war, armed hostilities or other international or national calamity directly or indirectly involving the United States; or (f) in the Board’s judgment, other event or condition which would have a material adverse effect on the Fund or its Stockholders if tendered Shares were purchased; or (4) the Board determines that effecting any such transaction would constitute a breach of their fiduciary duty owed to the Fund or its Stockholders. The Board may modify these conditions in light of experience.
The Fund reserves the right, at any time during the pendency of the Offer, to terminate, extend or amend the Offer in any respect. If the Fund determines to terminate or amend the Offer or to postpone the acceptance for payment of or payment for Shares tendered, it will, to the extent necessary, extend the period of time during which the Offer is open as provided in Section 14, “Extension of Tender Period; Termination; Amendments.” In the event any of the foregoing conditions are modified or waived in whole or in part at any time, the Fund will promptly make a public announcement of such waiver and may, depending on the materiality of the modification or waiver, extend the Offer period as provided in Section 14, “Extension of Tender Period; Termination; Amendments.”
9. NAV and Market Price.   The Shares currently trade on the NYSE under the symbol “TPZ.” The following table sets forth, on a quarterly basis, the high and low NAVs of the Shares and the high and low intraday sale prices of the Shares for each calendar quarter during the two years ended August 31, 2022.
NAV
Market Price*
High
Low
High
Low
September 1, 2020 to November 30, 2020
$ 13.24 $ 11.48 $ 10.18 $ 8.23
December 1, 2020 to February 28, 2021
$ 14.86 $ 13.04 $ 12.05 $ 10.37
March 1, 2021 to May 31, 2021
$ 15.87 $ 14.42 $ 13.23 $ 11.72
June 1, 2021 to August 31, 2021
$ 16.53 $ 15.05 $ 14.13 $ 12.71
September 1, 2021 to November 30, 2021
$ 16.48 $ 15.09 $ 14.42 $ 12.64
December 1, 2021 to February 28, 2022
$ 16.21 $ 14.87 $ 14.74 $ 12.56
March 1, 2022 to May 31, 2022
$ 16.95 $ 15.47 $ 14.92 $ 13.47
June 1, 2022 to August 31, 2022
$ 16.85 $ 14.02 $ 14.40 $ 12.14
 
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*
As reported on the NYSE.
The NAV per Share computed as of the close of business on September 23, 2022 was $14.32. On September 23, 2022, the high, low and closing prices of the Shares as reported on the NYSE were $12.73, $12.26 and $12.33, respectively.
10. Information With Respect to the Fund and the Fund’s Investment Manager.   The Fund is a closed-end, non- diversified management investment company organized as a Maryland corporation. The Shares were first offered to the public in July 28, 2009. As a closed-end investment company, the Fund differs from an open-end investment company (i.e., a mutual fund) in that it does not redeem its Shares at the election of a stockholder and does not continuously offer its shares for sale to the public.
Tortoise Capital Advisors, L.L.C. (“Tortoise”) serves as the Fund’s Investment Manager. Tortoise is a limited liability company organized under the laws of Delaware on October 4, 2002 and a registered investment adviser under the Investment Advisers Act of 1940. Tortoise has served as the Fund’s Investment Manager since July 28, 2009. The principal business address of Tortoise is 6363 College Boulevard, Suite 100A, Overland Park, KS 66211.
11. Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares.
The members of the Fund’s Board of Directors (the “Board of Directors”) are Rand Berney, H. Kevin Birzer, Conrad Ciccotello, Alexandra Herger and Jennifer Paquette. The executive officers of the Fund are P. Bradley Adams, Chief Executive Officer, Courtney Gengler, Principal Financial Officer and Treasurer, Brian Kessens, President, Shobana Gopal, Vice President, Diane Bono, Chief Compliance Officer, Sean Wickliffe, Vice President and Assistant Treasurer. The address of each member of the Board of Directors and each executive officer of the Fund is c/o Tortoise Power and Energy Infrastructure Fund, Inc., 6363 College Boulevard, Suite 100A, Overland Park, Kansas 66211, and the telephone number of each member of the Board of Directors and executive officer is 913-981-1020. Based on the number of Shares outstanding as of the May 31, 2022, the following persons (the named individuals being the Directors and executive officers of the Fund) own the number of Shares indicated in the below table:
Person
Number of Shares
Beneficial
Ownership (%)
Rand Berney
2,092.00(1) *
H. Kevin Birzer
4,150.00 *
Conrad Ciccotello
6,193.00(2) *
Alexandra Herger
250.00 *
Jennifer Paquette
750.32 *
P. Bradley Adams
2,714.00 *
Courtney Gengler
0 *
Brian Kessens
2,100.00(3) *
Shobana Gopal
0 *
Diane Bono
0 *
Sean Wickliffe
0 *
*
Indicates less than 1%.
(1)
Held jointly with his wife.
(2)
Held jointly with his wife.
(3)
Held with his wife
Based upon the Fund’s records and upon information provided to the Fund by its directors, executive officers and affiliates (as such term is used in Rule 12b-2 under the Exchange Act), neither the Fund nor, to the best of the Fund’s knowledge, any of the directors or executive officers of the Fund, nor any associates
 
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(as such term is used in Rule 12b-2 under the Exchange Act) of any of the foregoing, has effected any transactions in Shares during the sixty business day period prior to the date hereof, except that, as reported in a Form 4, Mr. Ciccotello purchased 2,300 shares of the Fund on September 22, 2022 at a purchase price of $12.92 per share.
Except as set forth in this Offer to Purchase, neither the Fund nor, to the best of the Fund’s knowledge, any of its affiliates, directors or executive officers, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to the Offer with respect to any Shares (including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any Shares, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations).
Any Shares to be purchased from any officer, director or affiliate of the Fund pursuant to the Offer will be on the same terms and conditions as any other purchase of Shares by the Fund pursuant to the Offer. To the best of the Fund’s knowledge, except as otherwise stated in this Offer to Purchase, none of the Fund’s directors, officers, or affiliates currently intends to tender Shares pursuant to the Offer.
Tortoise Capital Advisors, L.L.C. serves as Investment Manager (the “Advisor”) to the Fund pursuant to an investment management agreement. Under the investment management agreement, the Advisor provides investment advisory services to the Fund for an annual fee in an amount equal to 0.95% of the average monthly “Managed Assets” of the Company. “Managed Assets” means the total assets of the Company (including any assets attributable to any leverage that may be outstanding but excluding any net deferred tax assets) minus the sum of accrued liabilities (other than net deferred tax liabilities, debt representing financial leverage and the aggregate liquidation preference of any outstanding preferred shares).
The Fund also is a party to certain other service agreements. The Fund is a party to a Fund Accounting Servicing Agreement with U.S. Bancorp Fund Services, LLC d/b/a U.S. Bank Global Fund Services (“USBFS”) under which USBFS provides fund accounting services to the Fund. The Fund is a party to a Fund Administration Servicing Agreement with USBFS under which USBFS provides administration services to the Fund. U.S. Bank, N.A. serves as custodian for the Fund’s portfolio securities pursuant to the Custody Agreement entered into with the Fund. The Fund is a party to a transfer agency agreement with Computershare, pursuant to which Computershare acts as transfer agent, dividend disbursing agent and registrar for the Fund. The Fund has entered into a Credit Agreement with The Bank of Nova Scotia. pursuant to which the Fund may borrow money from The Bank of Nova Scotia. The amounts paid by the Fund under these service agreements are disclosed in the Fund’s financial statements, which can be found in the Fund’s annual and semiannual reports.
12. Certain Fees and Expenses.   The Fund will not pay to any broker or dealer, commercial bank, trust company or other person any solicitation fee for any Shares purchased pursuant to the Offer. The Fund will reimburse such persons for customary handling and mailing expenses incurred in forwarding the Offer. No such broker, dealer, commercial bank or trust company has been authorized to act as the agent of the Fund or the Depositary for purposes of the Offer.
The Fund has retained Computershare Inc. and its wholly owned subsidiary Computershare Trust Company, N.A. (together “Computershare”) to act as Depositary and Georgeson LLC to act as Information Agent. The Depositary and the Information Agent will each receive reasonable and customary compensation for their services and will also be reimbursed for certain out-of-pocket expenses and indemnified against certain liabilities.
13. Miscellaneous.   The Offer is not being made to, nor will the Fund accept tenders from, holders of Shares in any state or other jurisdiction in which the Offer would not be in compliance with the securities or Blue Sky laws of such jurisdiction.
The Fund is subject to the information and reporting requirements of the 1940 Act and in accordance therewith is obligated to file reports and other information with the U.S. Securities and Exchange Commission (the “Commission”) relating to its business, financial condition and other matters. The Fund has also filed an Issuer Tender Offer Statement on Schedule TO with the Commission. Such reports and other information are available for inspection at the public reference room at the Commission’s office, 100 F Street, N.E., Washington, D.C. 20549. Copies may be obtained, by mail, upon payment of the Commission’s customary
 
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charges, by writing to its principal office at 100 F Street, N.E., Washington, D.C. 20549. Such reports and other information are also available free of charge on the Commission’s website (sec.gov).
14. Extension of Tender Period; Termination; Amendments.
The Fund reserves the right, at any time and from time to time, to extend the period of time during which the Offer is pending by making a public announcement thereof. In the event that the Fund so elects to extend the tender period, the NAV for the Shares tendered will be computed as of the close of ordinary trading on the NYSE on the Expiration Date, as extended. During any such extension, all Shares previously tendered and not purchased or withdrawn will remain subject to the Offer. The Fund also reserves the right, at any time and from time to time up to and including the Expiration Date, to (a) terminate the Offer and not to purchase or pay for any Shares or, subject to applicable law, postpone payment for Shares upon the occurrence of any of the conditions specified in Section 8, “Certain Conditions of the Offer”; and (b) amend the Offer in any respect by making a public announcement thereof. Such public announcement will be issued no later than 9:00 a.m. New York City time not later than the next business day after the previously scheduled Expiration Date and will disclose the approximate number of Shares tendered as of that date. Without limiting the manner in which the Fund may choose to make a public announcement of extension, termination or amendment, except as provided by applicable law (including Rule 13e-4(d)(2), Rule 13e-4(e)(3), and Rule 14e-1(d) under the Exchange Act), the Fund shall have no obligation to publish, advertise or otherwise communicate any such public announcement.
If the Fund materially changes the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Fund will extend the Offer to the extent required by Rules 13e‑4(d)(2) and 13e-4(e)(3) under the Exchange Act. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. If (i) the Fund increases or decreases the price to be paid for Shares, or the Fund increases or decreases the number of Shares being sought and (ii) the Expiration Date is less than ten business days away, then the Expiration Date will be extended at least ten business days from the date of the notice.
15. Certain Federal Income Tax Consequences.   The following discussion describes certain U.S. federal income tax consequences of tendering Shares in the Offer. Except where noted, it deals only with Shares held as capital assets and does not deal with Stockholders subject to special treatment under the U.S. federal income tax laws, such as dealers in securities or commodities, traders in securities that elect to mark their holdings to market, insurance companies, financial institutions, tax- exempt entities, regulated investment companies, real estate investment trusts, partnerships or other pass through entities, U.S. expatriates, persons liable for the alternative minimum tax, persons holding Shares as a part of a hedging, conversion or constructive sale transaction or a straddle or U.S. Stockholders (as defined below) whose functional currency is not the U.S. dollar. Furthermore, the discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different from those discussed below. Stockholders should consult their own tax advisors concerning the U.S. federal income tax consequences of participating in the Offer in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.
As used herein, a U.S. Stockholder means a Stockholder that is for U.S. federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any State thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if it (x) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (y) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. A “Non-U.S. Stockholder” is a Stockholder (other than a partnership) that is not a U.S. Stockholder.
 
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An exchange of Shares for cash in the Offer by U.S. Stockholders will be a taxable transaction for U.S. federal income tax purposes. As a consequence of the exchange, the U.S. Stockholder will, depending on such U.S. Stockholder’s particular circumstances, be treated either as recognizing gain or loss from the disposition of the Shares or as receiving a dividend distribution from the Fund. Under Section 302(b) of the Code, a sale of Shares pursuant to the Offer generally will be treated as a sale or exchange if the receipt of cash by the Stockholder: (a) results in a complete termination of the Stockholder’s interest in the Fund, (b) results in a substantially disproportionate redemption with respect to the Stockholder, or (c) is not essentially equivalent to a dividend with respect to the Stockholder. In determining whether any of these tests has been met, Shares actually owned, as well as Shares considered to be owned by the Stockholder by reason of certain constructive ownership rules set forth in Section 318 of the Code, generally must be taken into account. If any of these three tests for sale or exchange treatment is met, a U.S. Stockholder will recognize gain or loss equal to the difference between the price paid by the Fund for the Shares purchased in the Offer and the Stockholder’s adjusted basis in such Shares. If such Shares are held as a capital asset, the gain or loss will be capital gain or loss and will be long-term capital gain or loss if the Shares have been held for more than one year. If, however, a U.S. Stockholder has held Shares for six months or less, any loss recognized upon the exchange will be treated as a long-term capital loss to the extent of any capital gain dividends received (or amounts credited as undistributed capital gains) with respect to such Shares. The maximum tax rate applicable to net capital gains recognized by individuals and other non-corporate taxpayers is currently (i) the same as the applicable ordinary income rate for capital assets held for one year or less (i.e., short-term capital gains) or (ii) 0%, 15% or 20% for capital assets held for more than one year (i.e., long-term capital gains), depending on taxable income and filing status.
If the requirements of Section 302(b) of the Code are not met, amounts received by a U.S. Stockholder who sells Shares pursuant to the Offer will be taxable to the U.S. Stockholder as a dividend to the extent of such U.S. Stockholder’s allocable share of the Fund’s current or accumulated earnings and profits. To the extent that amounts received exceed such U.S. Stockholder’s allocable share of the Fund’s current and accumulated earnings and profits for a taxable year, the distribution will first be treated as a non-taxable return of capital, causing a reduction in the adjusted basis of such U.S. Stockholder’s Shares, and any amounts in excess of the U.S. Stockholder’s adjusted basis will constitute taxable gain. Any remaining adjusted basis in the Shares tendered to the Fund will be transferred to any remaining Shares held by such U.S. Stockholder.
If the payment for any purchase of Shares pursuant to the Offer is treated as a taxable dividend to the selling Stockholder rather than as an exchange, the other Stockholders, including the non-tendering Stockholders, could be deemed to have received taxable stock distributions under certain circumstances. Stockholders are urged to consult their own tax advisors regarding the possibility of deemed distributions resulting from the purchase of Shares pursuant to the Offer.
Non-U.S. Stockholders.   The Depositary will withhold U.S. federal income taxes equal to 30% of the gross payments payable to a Non-U.S. Stockholder or his or her agent for any Shares purchased pursuant to the Offer unless the Depositary determines that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business within the United States. In order to obtain a reduced rate of withholding pursuant to a tax treaty, a Non-U.S. Stockholder must deliver to the Depositary before the payment a properly completed and executed Internal Revenue Service (“IRS”) Form W-8BEN. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a Non-U.S. Stockholder must deliver to the Depositary before the payment a properly completed and executed IRS Form W-8ECI. The Depositary will determine a shareowner’s status as a Non-U.S. Stockholder and eligibility for a reduced rate of, or exemption from, withholding by reference to any outstanding certificates or statements concerning eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS Forms W-8BEN or W-8ECI) unless facts and circumstances indicate that such reliance is not warranted. A Non-U.S. Stock- holder may be eligible to obtain a refund of all or a portion of any tax withheld if such shareowner meets the “complete termination,” “substantially disproportionate” or “not essentially equivalent to a dividend” test described above or is otherwise able to establish that no tax or a reduced amount of tax is due. Backup withholding generally will not apply to amounts subject to the 30% or a treaty-reduced rate of
 
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TABLE OF CONTENTS
 
withholding. Non-U.S. Stockholders are urged to consult their own tax advisors regarding the application of federal income tax withholding, including eligibility for a withholding tax reduction or exemption, and the refund procedure.
Backup Withholding.   See Section 11 of the Letter of Transmittal with respect to the application of backup withholding on payments made to Stockholders.
The tax discussion set forth above is included for general information only. Each shareowner is urged to consult such owner’s own tax advisor to determine the particular tax consequences to him or her of the Offer, including the applicability and effect of state, local and foreign tax laws.
* * * * *
Questions, requests for assistance and requests for additional copies of this Offer to Purchase and related materials should be directed to Georgeson LLC toll free at 1-877-668-1646.
Tortoise Power and Energy Infrastructure Fund, Inc.
The Letter of Transmittal and certificates for your Shares should be sent by you, your broker, dealer, commercial bank or trust company to the Depositary as set forth below.
The Depositary for the Offer to Purchase is:
COMPUTERSHARE INC. AND COMPUTERSHARE
TRUST COMPANY, N.A.
By First Class Mail:
By Registered, Certified,
Express Mail
or Overnight Courier:
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
P.O. Box 43011
Providence, RI 02940-3011
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
Suite V
150 Royall Street
Canton, MA 02021
Any questions or requests for assistance or additional copies of the Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other documents may be directed to the Information Agent at its telephone number and location listed below. Stockholders may also contact their broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer to Purchase is:
GEORGESON LLC
1290 Avenue of the Americas, 9th Floor,
New York, NY 10104
1-877-668-1646
 
15

 
 Exhibit (a)(1)(ii)
LETTER OF TRANSMITTAL
To Accompany Certificate(s) for Shares of Common Stock
or Order Tender of Uncertificated Shares of
TORTOISE POWER AND ENERGY
INFRASTRUCTURE FUND, INC.
Tendered Pursuant To Its Offer to Purchase
Dated October 3, 2022
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON NOVEMBER 1, 2022 OR SUCH LATER DATE TO WHICH THE OFFER TO PURCHASE IS EXTENDED (“EXPIRATION DATE”).
The Depositary for the Offer to Purchase is:
COMPUTERSHARE INC. AND COMPUTERSHARE TRUST COMPANY, N.A.
Depositary Addresses:
By First Class Mail:
By Registered, Certified or
Express Mail or Overnight Courier:
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
P.O. Box 43011
Providence, RI 02940-3011
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
Suite V
150 Royall Street
Canton, MA 02021
DESCRIPTION OF SHARES TENDERED
Name(s) and Addresses of Registered Holder(s):
(Please Fill in, if Blank, Exactly as Name(s)
Appear(s) on Certificate(s))
Shares Tendered ***
(Attach Additional Signed Schedule
if necessary)
Certificate
Number(s)*
Total
Number of
Shares
Evidenced
by
Certificates**
Number
of
Shares
Tendered
Dividend
Reinvestment
Shares Tendered
Total Shares
Tendered
*    Need not be completed by Stockholders who tender Shares by book-entry transfer.
**   Unless otherwise indicated, it will be assumed that all Shares evidenced by any certificates delivered
   to the Depositary are being tendered. See Instruction 5.
*** If the Shares being tendered are Shares held by the Transfer Agent pursuant to the Fund’s dividend    reinvestment plan, Stockholders should so indicate on page 3.

I HAVE LOST MY CERTIFICATE(S) FOR SHARES OF STOCK OF THE FUND AND REQUIRE ASSISTANCE WITH RESPECT TO REPLACING SUCH CERTIFICATE(S). SEE INSTRUCTION 3.
 

 
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN INSTRUCTION 2, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE STOCKHOLDER HAS THE RESPONSIBILITY TO CAUSE THE LETTER OF TRANSMITTAL, CERTIFICATES AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED.
This Letter of Transmittal is to be used (a) if certificates for Shares (as defined below) are to be forwarded herewith, or (b) if uncertificated Shares held by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment plan are to be tendered, or (c) if tenders are to be made by book-entry transfer to any of the accounts maintained by the Depositary at the Depository Trust Company (“DTC” or the “Book-Entry Transfer Facility”) pursuant to the procedure set forth in Section 5, “Procedure for Tendering Shares,” of the Fund’s Offer to Purchase. Stockholders whose certificates are not immediately available or who cannot deliver certificates for Shares (other than uncertificated Shares held by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment plan) or deliver confirmation of the book-entry transfer of their Shares into the Depositary’s account at the Book-Entry Transfer Facility and all other documents required hereby to the Depositary prior to 5:00 p.m., New York City time, on the Expiration Date, November 1, 2022 or such later date to which the Offer to Purchase is extended, may nevertheless tender their Shares according to the guaranteed delivery procedures set forth in Section 5, “Procedure for Tendering Shares,” of the Fund’s Offer to Purchase. See Instruction 2 below. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: 
 
Account Number: 
 
Transaction Code Number: 
 
If the tendered Shares are being tendered by a Nominee Holder on behalf of its customers, please state the number of customer accounts for whose benefit the tender is made:

CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARYAND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s): 
 
Date of Execution of Notice of Guaranteed Delivery: 
 
Name of Institution that Guaranteed Delivery: 
 
Account Number (if delivered by book-entry transfer): 
 
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING DOCUMENTS CAREFULLY.
 

 
Ladies and Gentlemen:
The undersigned hereby tenders to Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Fund”), the shares of the Fund’s Common Stock, $0.001 par value per share (the “Shares”) described below, upon the terms and conditions set forth in the Offer to Purchase dated October 3, 2022 receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constitute the “Offer”), at a purchase price equal to an amount per Share, net to the seller in cash (the “Purchase Price”), equal to 98% of the net asset value in U.S. dollars per Share as of the close of regular trading on the New York Stock Exchange on November 1, 2022 or such later date to which the Offer to Purchase is extended (the “Expiration Date”).
Subject to, and effective upon, acceptance of payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer to Purchase, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Fund all right, title and interest in and to all the Shares that are being tendered hereby and that are being accepted for purchase pursuant to the Offer to Purchase (and any and all dividends, distributions, other Shares or other securities or rights issued or issuable in respect of such Shares on or after November 1, 2022 or such later date to which the Offer to Purchase is extended (the “Expiration Date”)) and irrevocably constitutes and appoints the Fund the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any such dividends, distributions, other Shares or securities or rights), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates for such Shares (and any such other dividends, distributions, other Shares or securities or rights) or transfer ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), together, in either such case, with all accompanying evidences of transfer and authenticity to or upon the order of the Fund, upon receipt by the Depositary, as the undersigned’s agent, of the Purchase Price, (b) present such Shares (and any such other dividends, distributions, other Shares or securities or rights) for transfer on the books of the Fund, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), all in accordance with the terms of the Offer to Purchase.
The undersigned hereby represents and warrants that: (a) the undersigned has full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all dividends, distributions, other Shares or other securities or rights issued or issuable in respect of such Shares on or after the Expiration Date); (b) when and to the extent the Fund accepts the Shares for purchase, the Fund will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, proxies, encumbrances or other obligations relating to their sale or transfer, and not subject to any adverse claim; (c) on request, the undersigned will execute and deliver any additional documents deemed by the Depositary or the Fund to be necessary or desirable to complete the sale, assignment and transfer of the tendered Shares (and any and all dividends, distributions, other Shares or securities or rights issued or issuable in respect of such Shares on or after the Expiration Date); and (d) the undersigned has read and agreed to all of the terms of the Offer to Purchase and this Letter of Transmittal.
All authority conferred or agreed to be conferred in this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date in accordance with Section 6, “Withdrawal or Modification of Tender of Shares for Purchase,” of the Fund’s Offer to Purchase. After the Expiration Date, unless otherwise noted in Section 6 of the Offer, tenders made pursuant to the Fund’s Offer to Purchase will be irrevocable.
THE UNDERSIGNED TENDER ALL UNCERTIFICATED SHARES THAT MAY BE HELD IN THE NAME OF THE REGISTERED HOLDER(S) BY THE FUND’S TRANSFER AGENT PURSUANT TO THE FUND’S DIVIDEND REINVESTMENT PLAN.
  Yes   No
Note:   If you do not check either of the spaces above, uncertificated Shares, if any, held in the name of the registered holder(s) by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment plan will NOT be tendered.
 

 
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
The undersigned understands that the valid tender of Shares pursuant to any one of the procedures described in Section 5, “Procedure for Tendering Shares,” of the Fund’s Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and the Fund upon the terms and subject to the conditions of the Offer to Purchase.
The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, the Fund may not be required to purchase any of the Shares tendered hereby, or may accept for purchase, pro rata with Shares tendered by other Stockholders, fewer than all of the Shares tendered hereby.
Unless otherwise indicated herein under “Special Payment Instructions,” please return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) in the name(s) of the registered holder(s) appearing under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under “Description of Shares Tendered.” In the event that either the Special Delivery Instructions or the Special Payment Instructions are completed, please return such certificates to the person or persons so indicated. The undersigned recognizes that the Fund has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered holder thereof if the Fund does not accept for payment any of the Shares so tendered. The undersigned further recognizes that the Special Payment Instructions and the Special Delivery Instructions are not applicable to Shares tendered by book-entry transfer nor to uncertificated Shares held by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment plan, which Shares may be tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS
(See Instruction 8)
      To be completed ONLY if certificates for Shares not tendered or not purchased are to be issued in the name of and sent to someone other than the undersigned.
Issue Certificate to:
Name:
(Please Print)
Address:
(City, State, Zip Code)
(Complete Substitute Form W-9)
(Tax Identification (Social Security) Number)
SPECIAL DELIVERY INSTRUCTIONS
(See Instruction 8)
   To be completed ONLY if certificates for Shares not tendered or not purchased are to be issued in the name of the undersigned, but sent to someone other than the undersigned or to the undersigned at an address other than that shown above.
Mail Certificate to:
Name:
(Please Print)
Address:
(City, State, Zip Code)
 

 
SIGN HERE
(IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 HEREIN)
(Signature(s) of Stockholder(s))
Dated:  
      (Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) for the Shares or on a security position listing or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted herewith. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, agent, officer of a corporation or another person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.)
      (Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) for the Shares or on a security position listing or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted herewith. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, agent, officer of a corporation or another person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 6.)
Name(s) 
 
(Please Print)
Capacity (Full Title) 
 
Address 
 
                     City                     State                     Zip Code
Area Code and Telephone Number 
 
Employer Identification or
Social Security Number 
 
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 6)
Authorized Signature(s) 
 
Name 
 
(Please Print)
Name of Firm 
 
Address 
 
                     City                     State                     Zip Code
Dated:  
 

 
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Repurchase Offer
1. Guarantee of Signatures.   No signature guarantee on this Letter of Transmittal is required (i) if this Letter of Transmittal is signed by the registered holder of the Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith, unless such holder has completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” herein, or (ii) if such Shares are tendered for the account of a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., a commercial bank, credit union, savings association or trust company having an office, branch or agency in the United States, or other entity which is a member in good standing of a stock transfer association’s approved medallion program (each being hereinafter referred to as an “Eligible Institution”). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 6.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery Procedures.   This Letter of Transmittal is to be used only (a) if certificates are to be forwarded herewith, (b) if uncertificated Shares held by the Funds transfer agent pursuant to the Fund’s dividend reinvestment plan are to be tendered, or (c) if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in Section 5, “Procedure for Tendering Shares,” of the Fund’s Offer to Purchase. Certificates for all physically tendered Shares, or confirmation of a book-entry transfer in the Depositary’s account at the Book- Entry Transfer Facility of Shares tendered by book-entry transfer, together, in each case, with a properly completed and duly executed Letter of Transmittal or facsimile thereof with any required signature guarantees, any other documents required by this Letter of Transmittal should be mailed or delivered to the Depositary at the appropriate address set forth herein and must be received by the Depositary prior to 5:00 p.m., New York City time, on the Expiration Date. Stockholders whose certificates are not immediately available or who cannot deliver Shares and all other required documents to the Depositary prior to 5:00 p.m., New York City time, on the Expiration Date, or whose Shares cannot be delivered on a timely basis pursuant to the procedures for book-entry transfer prior to the Expiration Date, may tender their Shares by or through any Eligible Institution by properly completing and duly executing and delivering a Notice of Guaranteed Delivery (or facsimile thereof), which must be received by the Depositary prior to the Expiration Date, and by otherwise complying with the guaranteed delivery procedures set forth in Section 5, “Procedure for Tendering Shares,” of the Fund’s Offer to Purchase. Pursuant to such procedures, the certificates for all physically tendered Shares, or confirmation of book-entry transfer, as the case may be, as well as a properly completed and duly executed Letter of Transmittal, all other documents required by this Letter of Transmittal must be received by the Depositary within two business days after receipt by the Depositary of such Notice of Guaranteed Delivery, all as provided in Section 5, “Procedure for Tendering Shares,” of the Fund’s Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE STOCKHOLDER HAS THE RESPONSIBILITY TO CAUSE THE LETTER OF TRANSMITTAL, CERTIFICATES AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED.
No alternative, conditional or contingent tenders will be accepted, except as may be permitted in the Fund’s Offer to Purchase. All tendering Stockholders, by execution of this Letter of Transmittal (or facsimile thereof), waive any right to receive any notice of the acceptance for payment of Shares.
3. Lost Certificates.   In the event that any Stockholder is unable to deliver to the Depositary the Fund Certificate(s) representing his, her or its Shares due to the loss or destruction of such Certificate(s), such fact should be included on the face of this Letter of Transmittal. In such case, the Stockholder should also contact the Depositary, at their number 1-888-728-8784, to report the lost securities. The Depositary will
 

 
forward additional documentation which such stockholder must complete in order to effectively surrender such lost or destroyed Certificate(s) (including affidavits of loss and indemnity bonds in lieu thereof). There may be a fee in respect of lost or destroyed Certificates, but surrenders hereunder regarding such lost certificates will be processed only after such documentation has been submitted to and approved by the Depositary.
4. Inadequate Space.   If the space provided is inadequate, the certificate numbers and/or number of Shares should be listed on a separate, signed schedule attached hereto.
5. Partial Tenders and Unpurchased Shares.   (Not applicable to Stockholders who tender by book-entry transfer.) If fewer than all the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the column entitled “Number of Shares Tendered.” In such case, a new certificate for the remainder of the Shares evidenced by the old certificate(s) will be issued and sent to the registered holder, unless otherwise specified in the “Special Payment Instructions” or “Special Delivery Instructions” boxes in this Letter of Transmittal, as soon as practicable after the Expiration Date of the Offer to Purchase. All Shares represented by certificates listed and delivered to the Depositary are deemed to have been tendered unless otherwise indicated.
6. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
(a)   If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) on the face of the certificates.
(b)   If any of the tendered Shares are held of record by two or more joint holders, ALL such holders must sign this Letter of Transmittal.
(c)   If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many Letters of Transmittal as there are different registrations of certificates.
(d)   If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made, or the certificates for Shares not tendered or purchased are to be issued, to a person other than the registered holder(s), in which case the endorsements or signatures on the stock powers, as the case may be, must be signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. See also Instruction 1.
(e)   If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, agents, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and must submit proper evidence satisfactory to the Fund of their authority to so act.
(f)   If this Letter of Transmittal is signed by a person(s) other than the registered holder(s) of the certificates listed and transmitted hereby, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear on the certificates. Signatures on such certificates of stock powers must be guaranteed by an Eligible Institution. See also Instruction 1.
7. Stock Transfer Taxes.   Except as set forth in this Instruction 7, no stock transfer tax stamps or funds to cover such stamps need accompany this Letter of Transmittal, and the Fund will pay all stock transfer taxes, if any, with respect to the transfer and sale of Shares to it pursuant to the Offer. If, however, payment of the repurchase price is to be made to, or (in the circumstances permitted by the Fund’s Offer to Purchase) if Shares not tendered or not purchased are to be registered in the name of any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder or such other person) payable on account of the transfer to such person will be the responsibility of the transferor and proper evidence of the payment of such taxes, or exemption therefrom, will need to be submitted to the Agent.
 

 
8.   Special Payment and Delivery Instructions.   If certificates for Shares not tendered or not purchased are to be issued in the name of a person other than the person signing this Letter of Transmittal or if such certificates are to be sent to someone other than the person signing this Letter of Transmittal or to the person signing this Letter of Transmittal at an address other than that shown above, the boxes captioned “Special Payment Instructions” and/or “Special Delivery Instructions” on this Letter of Transmittal should be completed. Signatures must be guaranteed by an Eligible Institution. See also Instruction 1.
9. Irregularities.   All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Fund, in its sole discretion, which determination shall be final and binding. The Fund reserves the absolute right to reject any or all tenders of any particular Shares (i) determined by it not to be in proper form or (ii) the acceptance of or payment for which may, in the opinion of the Fund’s counsel, be unlawful. The Fund also reserves the absolute right to waive any of the conditions of the Offer, in whole or in part, or any defect or irregularity in tender of any particular Shares or Stockholder, and the Fund’s interpretations of the terms and conditions of the Offer (including these instructions) shall be final and binding. No tender of Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. Neither the Fund, the Depositary, the Information Agent nor any other person shall be obligated to give notice of defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notice. Unless waived, any defects or irregularities must be cured within such time as the Fund shall determine.
10. Requests for Assistance and Additional Copies.   Requests for assistance should be directed to, and additional copies of the Fund’s Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of Transmittal may be obtained from, the Information Agent at the address set forth at the end of this Letter of Transmittal or from your broker, dealer, commercial bank, trust company, or other nominee. The Information Agent will also provide Stockholders, upon request, with a Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding (W-8BEN) or a Certificate of Foreign Person’s Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States (W-8ECI).
11. Backup Withholding.   Each Stockholder that desires to participate in the Offer to Purchase must, unless an exemption applies, provide the Depositary with the Stockholder’s taxpayer identification number on the Substitute Form W-9 set forth in this Letter of Transmittal, with the required certifications being made under penalties of perjury. If the Stockholder is an individual, the taxpayer identification number is his or her social security number. If the Depositary is not provided with the correct taxpayer identification number, the Stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service in addition to being subject to backup withholding.
Stockholders are required to give the Depositary the taxpayer identification number of the record owner of the Shares by completing the Substitute Form W-9 included with this Letter of Transmittal. If the Shares are registered in more than one name or are not in the name of the actual owner, consult the “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9,” which immediately follow the Substitute Form W-9.
If backup withholding applies, the Depositary is required to withhold 24% of any payment made to the Stockholder with respect to Shares purchased pursuant to the Offer. Backup withholding is not an additional tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by the Stockholder from the Internal Revenue Service.
Certain Stockholders (including, among others, most corporations and certain foreign persons) are exempt from backup withholding requirements. To qualify as an exempt recipient on the basis of foreign status, a Stockholder must generally submit a properly completed Form W-8BEN or Form W-8ECI, signed under penalties of perjury, attesting to that person’s exempt status. A Stockholder would use a Form W-8BEN to certify that it is neither a citizen nor a resident of the United States and would use a Form W-8ECI to certify that (1) it is neither a citizen nor resident of the United States, and (2) the proceeds of the sale of the Shares are effectively connected with a U.S. trade or business. A foreign Stockholder (a “Non-U.S. Stockholder”) may also use a Form W-8BEN to certify that it is eligible for benefits under a tax treaty between the United States and such foreign person’s country of residence.
 

 
A STOCKHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO HIS OR HER QUALIFICATION FOR EXEMPTION FROM THE BACKUP WITHHOLDING REQUIREMENTS AND THE PROCEDURE FOR OBTAINING AN EXEMPTION.
12. Withholding for Non-U.S. Stockholders.   Even if a Non-U.S. Stockholder has provided the required certification to avoid backup withholding, the Depositary will withhold U.S. federal income taxes equal to 30% of the gross payments payable to a Non-U.S. Stockholder or his or her agent unless the Depositary determines that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business within the United States. In order to obtain a reduced rate of withholding pursuant to a tax treaty, a Non-U.S. Stockholder must deliver to the Depositary before the payment a properly completed and executed IRS Form W-8BEN. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a Non-U.S. Stockholder must deliver to the Depositary before the payment a properly completed and executed IRS Form W-8ECI.
The Depositary will determine a shareowner’s status as a Non-U.S. Stockholder and eligibility for a reduced rate of, or exemption from, withholding by reference to any outstanding certificates or statements concerning eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS Forms W-8BEN or W-8ECI) unless facts and circumstances indicate that such reliance is not warranted. A Non-U.S. Stockholder may be eligible to obtain a refund of all or a portion of any tax withheld if such shareowner satisfies certain requirements or is otherwise able to establish that no tax or a reduced amount of tax is due. Backup withholding generally will not apply to amounts subject to the 30% or a treaty-reduced rate of withholding. Non-U.S. Stockholders are urged to consult their own tax advisors regarding the application of federal income tax withholding, including eligibility for a withholding tax reduction or exemption, and the refund procedure.
 

 
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PAYER’S NAME: COMPUTERSHARE INC. SUBSTITUTEPart 1 — PLEASE PROVIDE YOUR NAME AND TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.Part 2 — CERTIFICATION. Underpenalty of perjury, I certify that:(1)The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and(2)I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and(3)I am a U.S. person (including aU.S. resident alien). Name Social Security Number OR Employer Identification Number Part 3 — Awaiting TINFORM W-9Department of theTreasuryInternal RevenueServicePayer’s Request forTaxpayerIdentificationNumber (TIN)Certificate Instructions — You must cross out
item (2) above if you have been notified by the IRS that you are subject to backup withholding because of under- reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2).The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.SIGNATURESign HereDATE NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 24% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER TO PURCHASE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBERIcertify under penalties of perjury that a taxpayer identification number has not been issued to me, and either ( I have mailed ordelivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or SocialSecurity Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do notprovide a taxpayer identification number by the time of payment, 24% of all reportable payments made to me will be withheld. withheld.SignatureDate
 

 
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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9Guidelines for Determining the Proper Identification Number for the Payee (You) to Give the Payer. — Social security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All “Section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service. For this type of account:Give the social security number of —1.IndividualThe individual Payees that may be exempt from backup withholding include:•A corporation. 2.Two or more individuals (joint account)3.Custodian account of a minor (Uniform Gift to Minors Act)4.a. The usual revocable savings trust account (grantor is also trustee)b. So-called trust account that is not a legal or valid trust under state law5.Sole proprietorship or disregarded entity owned by an individual The
actual owner of the account or, if combined funds, the first individual on the account1The minor2The grantor-trustee1 The actual owner1The owner3 •A financial institution.•A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.•A real estate investment trust.•A common trust fund operated by a bank under Section 584(a).•An entity registered at all times during the tax year under the Investment Company Act of 1940.•A middleman known in the investment community as a nominee or custodian.•A futures commission merchant registered with the Commodity Futures Trading Commission. For this type of account:Give the employer identification number of — •A foreign central bank of issue.•A trust exempt from tax under Section 664 or described in Section 4947. 6.Disregarded entity not owned by an individual The owner4 Payments of dividends and patronage dividends generally exempt from backup withholding include: 7.A valid trust, estate, or pension trustThe legal entity 8.Corporate or LLC electing corporate status on Form 88329.Association, club, religious, charitable, educational, or other tax-exempt organization The corporation The organization •Payments to nonresident aliens subject to withholding under Section 1441.•Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.•Payments of patronage dividends not paid in money. 10.Partnership or multi-member LLCThe partnership11.A broker or registered nomineeThe broker or nominee •Payments made by certain foreign organizations.•Section 404(k) payments made by an ESOP. 12.Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments The public entity Payments of interest generally exempt from backup withholding include:•Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and you have not provided your correct taxpayer identification number to the payer.•Payments described in Section 6049(b)(5) to nonresident aliens.•Payments on tax-free covenant bonds under Section 1451. 1.List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.2.Circle the minor’s name and furnish the minor’s social security number.3.You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your social security number or your employer identification number (if you have one).4.List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representa- tive or trustee unless the legal entity itself is not designated in the account title.)NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.Obtaining a NumberIf you don’t have a taxpayer identification number or you don’t know your number, obtain Form SS-5, Application for a Social Security Card, at the local Social Security Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX-FORM, and apply for a number.Payees Exempt from Backup WithholdingPayees specifically exempted from backup withholding include:•An organization exempt from tax under Section 501(a), an individual retire- ment account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).•The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or instrumentality of any one or more of the foregoing.•An international organization or any agency or instrumentality thereof.•A foreign government and any political subdivision, agency or instrumentality thereof.
 

 
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•Payments made by certain foreign organizations.•Mortgage interest paid to you.Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see the regulations under Sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N.Exempt payees described above must file Form W-9 or a substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” ON THE FACE OF THE FORM, SIGN AND DATE THE FORM, AND RETURN IT TO THE PAYER.Privacy Act Notice — Section 6109 requires you to provide your correct tax- payer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to the payer. Certain penalties may also apply.Penalties(1)Failure to Furnish Taxpayer Identification Number. — If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.(2)Civil Penalty for False Information With Respect to Withholding. — If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.(3)Criminal Penalty for Falsifying Information. — Willfully falsifying cer- tifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE
 

 
IMPORTANT: This Letter of Transmittal or a manually signed facsimile thereof (together with certificates for Shares and all other required documents) or the Notice of Guaranteed Delivery must be received by the Depositary prior to 5:00 p.m., New York City time, on the Expiration Date, at the appropriate address set forth below:
The Depositary for the Repurchase Offer is:
COMPUTERSHARE INC. AND COMPUTERSHARE
TRUST COMPANY, N.A.
Depositary Addresses:
By First Class Mail:
By Registered, Certified
or Express Mail or
Overnight Courier:
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
P.O. Box 43011
Providence, RI 02940-3011
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
Suite V
150 Royall Street
Canton, MA 02021
Any questions or requests for assistance or additional copies of this Letter of Transmittal, the Fund’s Offer to Purchase, the Notice of Guaranteed Delivery and other accompanying materials may be directed to the Information Agent at its telephone number and location listed below. Stockholders may also contact their broker, commercial bank or trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON LLC.
1290 Avenue of the Americas
9th Floor
New York, New York 10104
Toll Free: 1-877-668-1646
 

 
 Exhibit (a)(1)(iii)
Offer by
TORTOISE POWER AND
ENERGY INFRASTRUCTURE
FUND, INC.
To Purchase for Cash
up to 5% of the Fund’s Outstanding
Shares of Common Stock
THE OFFER TO PURCHASE WILL EXPIRE ON NOVEMBER 1, 2022 AT 5:00 P.M.,
NEW YORK CITY TIME UNLES THE OFFER TO PURCHASE IS EXTENDED.
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES
BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE
OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL.
October 3, 2022
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We are enclosing herewith the material listed below relating to the offer of Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation registered under the Investment Company Act of 1940, as amended, as a closed-end, non-diversified management investment company (the “Fund”), to purchase up to 5% of the Fund’s outstanding shares of Common Stock, par value $0.001 per share (the “Shares”), upon the terms and conditions set forth in the Offer to Purchase dated October 3, 2022 and in the related Letter of Transmittal (which together constitute the “Purchase Offer”). The price to be paid for the Shares is an amount per Share, equal to 98% of the net asset value per Share as determined by the Fund at the close of regular trading on the New York Stock Exchange on November 1, 2022 (the “Purchase Pricing Date”).
Tortoise Capital Advisors, L.L.C. (“Tortoise”) serves as the Fund’s Investment Manager. Tortoise is a limited liability company organized under the laws of Delaware on October 4, 2002 and a registered investment adviser under the Investment Advisers Act of 1940. The principal business address of Tortoise is 6363 College Boulevard, Suite 100A, Overland Park, KS 66211.
We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Purchase Offer to their attention as promptly as possible. No fees or commission will be payable to brokers, dealers or other persons for soliciting tenders of Shares pursuant to the Offer. The Fund will, upon request, reimburse you for reasonable and customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Fund will pay all transfer taxes on its purchase of Shares, subject to Instruction 7, “Stock Transfer Taxes,” of the Letter of Transmittal. However, backup withholding at a 24% rate may be required unless either an exemption is proved or the required taxpayer identification information and certifications are provided. See Section 15, “Certain Federal Income Tax Consequences,” of the Offer to Purchase and Instruction 11, “Backup Withholding,” of the Letter of Transmittal.
The Fund’s Shares have at times traded at a premium to the Fund’s net asset value per Share. It may not be in a Stockholder’s interest to tender Shares in connection with the Purchase Offer if the Shares are trading at a premium. The market price of the Shares can and does fluctuate. Accordingly, on the Purchase Pricing Date, the market price of the Shares may be above or below the Fund’s net asset value per Share.
For your information and for forwarding to your clients, we are enclosing the following documents:
1.
A letter to Stockholders of the Fund from P. Bradley Adams, Chief Executive Officer of the Fund;
2.   The Offer to Purchase, dated October 3, 2022;
3.   The Letter of Transmittal for your use and to be provided to your clients;
 

 
4.   Notice of Guaranteed Delivery;
5.
Form of letter to clients that may be sent to your clients for whose accounts you hold Shares registered in your name (or in the name of your nominee); and
The Purchase Offer is not being made to, nor will the Fund accept tenders from, holders of Shares in any state or other jurisdiction in which the Purchase Offer would not be in compliance with the securities or Blue Sky laws of such jurisdiction.
As described in the Fund’s Offer to Purchase under Section 5, “Procedure for Tendering Shares,” tenders may be made without the concurrent deposit of stock certificates if (1) such tenders are made by or through a broker or dealer that is a member firm of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, Inc. or a commercial bank or trust company having an office, branch, or agency in the United States; and (2) certificates for Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary’s account at a Book-Entry Transfer Facility (as defined in the Letter of Transmittal)), together with a properly completed and duly executed Letter of Transmittal, and any other documents required by the Letter of Transmittal, are received by the Depositary within two business days after receipt by the Depositary of a properly completed and duly executed Notice of Guaranteed Delivery.
As described in the Offer to Purchase, if more than 5% of the Fund’s outstanding Shares are duly tendered prior to the Expiration Date, the Fund will purchase Shares tendered on a pro rata basis.
Neither the Fund, its Board of Directors nor the Investment Manager to the Fund makes any recommendation to any Stockholder whether to tender any Shares.
For additional information or copies of the enclosed material, please contact Georgeson Inc. (the “Information Agent”) toll free at 1-877-668-1646.
Very truly yours,
[MISSING IMAGE: sg_bradleyadams-bw.jpg]
P. Bradley Adams
Chief Executive Officer
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC., THE INFORMATION AGENT, OR THE DEPOSITARY OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY MATERIAL ON THEIR BEHALF WITH RESPECT TO THE OFFER, OTHER THAN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY SET FORTH IN SUCH MATERIAL.
 

 
 Exhibit (a)(1)(iv)
Offer by
TORTOISE POWER AND ENERGY
INFRASTRUCTURE FUND, INC.
To Purchase for Cash
up to 5% of the Fund’s Outstanding Shares of
Common Stock
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON NOVEMBER 1, 2022 UNLESS THE OFFER TO
PURCHASE IS EXTENDED
THIS OFFER TO PURCHASE IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL.
October 3, 2022
To Our Clients:
Enclosed for your consideration is the Offer to Purchase, dated October 3, 2022, of Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation registered under the Investment Company Act of 1940, as amended, as a closed-end, non-diversified management investment company (the “Fund”), and a related Letter of Transmittal (which together constitute the “Offer”), pursuant to which the Fund is offering to repurchase up to 5% of the Fund’s outstanding shares of Common Stock, par value $0.001 per share (the “Shares”), upon the terms and conditions set forth in the Offer.
Tortoise Capital Advisors, L.L.C. (“Tortoise”) serves as the Fund’s Investment Manager. Tortoise is a limited liability company organized under the laws of Delaware on October 4, 2002 and a registered investment adviser under the Investment Advisers Act of 1940. The principal business address of Tortoise is 6363 College Boulevard, Suite 100A, Overland Park, KS 66211.
The Offer to Purchase and the Letter of Transmittal are being forwarded to you for your information only and cannot be used by you to tender Shares held by us for your account. We are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and only pursuant to your instructions.
Your attention is called to the following:
(1)   The purchase price to be paid for the Shares is an amount per Share equal to 98% of the net asset value per Share as determined by the Fund at the close of regular trading on the New York Stock Exchange on November 1, 2022 or such later date to which the Offer is extended (the “Expiration Date”). The Fund’s Shares have at times traded at a premium to the Fund’s net asset value per Share. It may not be in a Stockholder’s interest to tender Shares in connection with the Offer if the Shares are trading at a premium. The market price of the Shares can and does fluctuate. Accordingly, on the Expiration Date, the market price of the Shares may be above or below the Fund’s net asset value per Share. The Fund’s net asset value and the market price of the Fund’s Common Stock, can be obtained on our website at https://cef.tortoiseecofin.com/ or from Georgeson LLC, the Fund’s Information Agent, by calling toll free at 1-877-668-1646.
(2)   The Offer is not conditioned upon any minimum number of Shares being tendered.
(3)   If the Offer is not suspended or postponed, the Fund will purchase all Shares validly tendered prior to 5:00 p.m., New York City time, on the Expiration Date, provided that the number of Shares tendered by all stockholders does not exceed 5% of the Fund’s outstanding Shares. In the event that more than 5% of the Fund’s outstanding Shares are tendered, the Fund will purchase 5% of the Fund’s outstanding Shares on a pro rata basis.
 

 
(4)   Tendering Stockholders will not be obligated to pay brokerage commissions or, subject to Instruction 7, “Stock Transfer Taxes,” of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Fund pursuant to the Offer.
(5)   Your instructions to us should be forwarded in ample time before the Expiration Date to permit us to submit a tender on your behalf. Instructions received after this date will not be honored.
If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form set forth below. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified below. YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE IN ORDER TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OFFER.
The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making or acceptance of the Repurchase Offer would not be in compliance with the applicable law.
Neither the Fund, its Board of Directors nor the Investment Manager to the Fund is making any recommendation to any Stockholder whether to tender or refrain from tendering Shares in the Offer. Each Stockholder is urged to read and evaluate the Offer and accompanying materials carefully.
 

 
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter, and the enclosed Offer to Purchase, dated October 3, 2022 relating to Tortoise Power and Energy Infrastructure Fund, Inc. (the “Fund”) to purchase up to 5% of the Fund’s outstanding shares of Common Stock, par value $0.001 per share (the “Shares”).
This will instruct you to tender to the Fund the number of Shares indicated below (which are held by you for the account of the undersigned), upon the terms and subject to the conditions set forth in the Offer to Purchase that you have furnished to the undersigned.
AGGREGATE NUMBER OF SHARES TO BE TENDERED:
                 Shares
Enter number of Shares to be tendered.
 

 
 Exhibit (a)(1)(v)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK OF
TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
This form, or one substantially equivalent hereto, must be used to accept the Offer (as defined below) if stockholders’ certificates for shares of common stock, par value $0.001 per share (the “Shares”) of Tortoise Power and Energy Infrastructure Fund, Inc. (the “Fund”), are not immediately available or time will not permit the Letter of Transmittal and other required documents to be delivered to the Depositary on or before 5:00 p.m., New York City time, November 1, 2022 or such later date to which the Offer is extended (the “Expiration Date”). Such form may be delivered email or mailed to the Depositary, and must be received by the Depositary on or before the Expiration Date. See Section 5, “Procedure for Tendering Shares,” of the Offer to Purchase.
The Depositary:
COMPUTERSHARE INC. AND COMPUTERSHARE TRUST COMPANY, N.A.
Email for Guarantee of Deliveries ONLY: canoticeofguarantee@computershare.com
For Account Information Call:
Georgeson LLC
Toll Free: 1-877-668-1646
By First Class Mail:
By Registered, Certified
or Express Mail or
Overnight Courier:
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
P.O. Box 43011
Providence, RI 02940-3011
Computershare Shareholder Services, Inc.
Attn: Voluntary Corporate Actions
Suite V
150 Royall Street
Canton, MA 02021
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA EMAIL OTHER THAN ONE LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY
 

 
Ladies and Gentlemen:
The undersigned hereby tenders to Tortoise Power and Energy Infrastructure Fund, Inc. (the “Fund”), upon the terms and subject to the conditions set forth in its Offer to Purchase, dated October 3, 2022 and the related Letter of Transmittal (which together constitute the “Offer”), receipt of which is hereby acknowledged, the number of Shares set forth on the reverse side pursuant to the guaranteed delivery procedures set forth in Section 5, “Procedure for Tendering Shares,” of the Offer to Purchase.
Number of Shares Tendered:  
Certificate Nos. (if available):
   
If Shares will be tendered by book-entry transfer, check box:

The Depository Trust Company
Account Number:
   
Name(s) of Record Holder(s):
   
Address:
   
Area Code and Telephone Number:
   
Taxpayer Identification (Social Security) Number:
   
The undersigned also tenders all uncertificated Shares that may be held in the name of the registered holder(s) by the Fund’s transfer agent pursuant to the Fund’s dividend reinvestment plan:
 Yes No
(Note: If neither of these boxes is checked,
any such uncertificated Shares will not be tendered.)
Dated:  
Signature(s)
 

 
GUARANTEE
      The undersigned, a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office, branch, or agency in the United States, hereby (a) guarantees to deliver to the Depositary certificates representing the Shares tendered hereby, in proper form for transfer (or tender shares pursuant to the procedures for book-entry transfer) into the Depositary’s account at The Depositary Trust Company, together with (i) a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees and (ii) other required documents, within two business days after the Expiration Date of the Offer, and (b) represents that such tender of Shares complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended. Participants should notify the Depositary prior to covering through the submission of a physical security directly to the Depositary based on a guaranteed delivery that was submitted via DTC’s PTOP platform.
Name of Firm: 
 
(Authorized Signature)
Address: 
 
Name: 
 
(Please Print)
CityStateZip Code
Title: 
 
Area Code and Tel. No. 
 
Dated: 
 
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE
CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
 

 

Exhibit (a)(5)(ii)

 

 

 

 

Tortoise Announces Tender Offers for its Closed-End Funds

 

Tortoise Energy Infrastructure Corp. (NYSE: TYG)

Tortoise Midstream Energy Fund, Inc. (NYSE: NTG)

Tortoise Pipeline & Energy Fund, Inc. (NYSE: TTP)

Tortoise Energy Independence Fund, Inc. (NYSE: NDP)

Tortoise Power and Energy Infrastructure Fund, Inc. (NYSE: TPZ)

 

FOR IMMEDIATE RELEASE

 

OVERLAND PARK, KS – October 3, 2022 – Tortoise announced today the commencement of cash tender offers for each of the following Funds.

 

Fund Tender Offer Amount
TYG Up to 5% or 596,395 of its outstanding common shares
NTG Up to 5% or 282,149 of its outstanding common shares
TTP Up to 5% or 111,388 of its outstanding common shares
NDP Up to 5% or 92,299 of its outstanding common shares
TPZ Up to 5% or 326,324 of its outstanding common shares

 

Each tender offer will be conducted at a price equal to 98% of each Fund’s net asset value (NAV) per share as of the close of regular trading on the New York Stock Exchange (NYSE) on the date the tender offer expires. Each tender offer will expire at 5:00 P.M., Eastern Time on November 1, 2022 or on such later date to which the offer is extended. The pricing date will also be November 1, 2022, unless extended. If the number of shares tendered exceeds the maximum amount of a tender offer, the Fund will purchase shares from tendering shareholders on a pro-rata basis (disregarding fractional shares). Accordingly, there is no assurance that a Fund will purchase all of a shareholder's tendered common shares in connection with the relevant tender offer.

 

Each Fund may sell portfolio instruments during the pendency of its tender offer to raise cash for the purchase of common shares. Thus, it is likely that during the pendency of each tender offer, and possibly for a short time thereafter, each Fund will hold a greater than normal percentage of its net assets in cash and cash equivalents. This larger cash position may interfere with a Fund's ability to meet its investment objectives and invest consistent with its investment strategy.

 

Each tender offer is being made on the terms and subject to the conditions set forth in the relevant Fund's tender offer statement on Schedule TO (including an offer to purchase, a related letter of transmittal and other offer documents) that has been filed with the Securities and Exchange Commission (the "SEC"). All of these documents contain important information about the relevant Tender Offer. Shareholders of each Fund should read their documents carefully as they contain important information about the relevant Tender Offer. Shareholders of each Fund can obtain a free copy of the relevant documents at the SEC's website at www.sec.gov or from the Fund by calling Georgeson LLC, the Fund's information agent for the tender offer, at 1-877-278-9672 for TYG, 1-888-666-2580 for NTG, 1-866203-9401 for TTP, 1-866-432-2791 for NDP, and 1-877-668-1646 for TPZ.

 

As previously announced, the second conditional tender offer measurement period is from August 1, 2022 through July 31, 2023 with a 10% discount threshold and repurchase price of 98% of NAV.

 

About Tortoise

 

Tortoise focuses on energy & power infrastructure and the transition to cleaner energy. Tortoise’s solid track record of energy value chain investment experience and research dates back more than 20 years. As one of the earliest investors in midstream energy, Tortoise believes it is well-positioned to be at the forefront of the global energy evolution that is underway. With a steady wins approach and a long-term perspective, Tortoise strives to make a positive impact on clients and communities. To learn more, please visit www.TortoiseEcofin.com.

 

Tortoise Capital Advisors, L.L.C. is the adviser to Tortoise Energy Infrastructure Corp., Tortoise Midstream Energy Fund, Inc., Tortoise Pipeline & Energy Fund, Inc., Tortoise Energy Independence Fund, Inc. and Tortoise Power and Energy Infrastructure Fund, Inc.

 

For additional information on these funds, please visit cef.tortoiseecofin.com.

 

6363 College Boulevard, Overland Park, KS 66211   |  Main 1-913-981-1020   |   Fax 1-913-981-1021   |   www.TortoiseEcofin.com

 

 

 

Important Notice

This announcement is not a recommendation, an offer to purchase or a solicitation of an offer to sell shares of the Funds. Each Tender Offer will be made only by an offer to purchase, a related letter of transmittal and other documents filed with the SEC as exhibits to a tender offer statement on Schedule TO, with all such documents available on the SEC’s website at www.sec.gov. For each Tender Offer, the Funds will also make available to shareholders without charge the offer to purchase and the letter of transmittal. Shareholders should read these documents carefully, as they would contain important information about the tender offer.

 

Cautionary Statement Regarding Forward-Looking Statements

This press release contains certain statements that may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although the funds and Tortoise Capital Advisors believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the fund’s reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the funds and Tortoise Capital Advisors do not assume a duty to update this forward-looking statement.

 

Contact information
For more information contact Jen Ashlock at (913) 981-1020 or info@tortoiseecofin.com.

 

 

 

Exhibit (b)(1)(i)

 

EXECUTION VERSION

 

CREDIT AGREEMENT

 

dated as of May 17, 2016

 

between

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

and

 

THE BANK OF NOVA SCOTIA

 

Bryan Cave LLP 

1290 Avenue of the Americas 

New York, New York 10104-3300

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS 1
  1.1 Defined Terms 1
  1.2 Terms Generally 17
  1.3 Accounting Terms 18
  1.4 Non-Recourse Persons 18
       
ARTICLE II THE CREDITS 18
  2.1 Commitment 18
  2.2 Variable Rate Loans 19
  2.3 Fixed Rate Loans 20
  2.4 Termination and Reduction of Commitment 21
  2.5 Repayment of Loans 21
  2.6 Voluntary Prepayments 21
  2.7 Payments Generally 22
  2.8 Evidence of Debt 22
  2.9 Pricing Changes 22
       
ARTICLE III INTEREST, FEES, YIELD PROTECTION, ETC. 23
  3.1 Interest 23
  3.2 Fees 23
  3.3 Increased Costs 23
  3.4 Taxes 24
  3.5 Alternate Rate of Interest 27
  3.6 Other LIBOR Provisions 27
  3.7 Break Funding Payments 28
       
ARTICLE IV REPRESENTATIONS AND WARRANTIES 28
  4.1 Organization and Power 28
  4.2 Authority and Execution 29
  4.3 Binding Agreement 29
  4.4 Litigation 29
  4.5 Approvals and Consents 29
  4.6 No Conflict 30
  4.7 Taxes 30
  4.8 Compliance 30
  4.9 Property 30
  4.10 Federal Reserve Regulations; Use of Loan Proceeds 31
  4.11 No Material Adverse Effect 31
  4.12 Material Agreements 31
  4.13 Financial Condition 31
  4.14 No Misrepresentation 31
  4.15 Sanctions, Etc. 31
  4.16 Investment Company Status 32
  4.17 ERISA 33

i

 

ARTICLE V CONDITIONS 33
  5.1 Effective Date 33
  5.2 Each Credit Event 34
       
ARTICLE VI AFFIRMATIVE COVENANTS 35
  6.1 Financial Statements and Other Information 35
  6.2 Notice of Material Events 36
  6.3 Legal Existence 37
  6.4 Insurance 37
  6.5 Payment of Indebtedness and Performance of Obligations 37
  6.6 Observance of Legal Requirements 37
  6.7 Books and Records; Visitation 37
  6.8 Purpose of Loans 38
  6.9 Maintenance of Status 38
       
ARTICLE VII NEGATIVE COVENANTS 38
  7.1 Indebtedness; Senior Securities 38
  7.2 Liens 39
  7.3 Fundamental Changes 39
  7.4 Restricted Payments 39
  7.5 Fundamental Policies; Valuation 40
  7.6 Amendments and Changes 40
  7.7 Financial Covenants 40
  7.8 Investment 40
  7.9 Sanctions, Etc. 41
       
ARTICLE VIII EVENTS OF DEFAULT 41
  8.1 Events of Default 41
  8.2 Remedies 43
       
ARTICLE IX MISCELLANEOUS 44
  9.1 Notices 44
  9.2 Waivers; Amendments 44
  9.3 Expenses; Indemnity; Damage Waiver 45
  9.4 Successors and Assigns 45
  9.5 Survival 46
  9.6 Counterparts; Integration; Effectiveness 46
  9.7 Severability 47
  9.8 Right of Setoff 47
  9.9 Governing Law; Jurisdiction; Consent to Service of Process 47
  9.10 WAIVER OF JURY TRIAL 48
  9.11 Headings 48
  9.12 Interest Rate Limitation 48
  9.13 Treatment of Certain Information 49
  9.14 USA Patriot Act Notice 49

ii

 

EXHIBITS:
   
Exhibit A Form of Note
Exhibit B Outline of Opinion of Counsel to the Borrower
Exhibit C-1 Form of Written Variable Borrowing Request
Exhibit C-2 Form of Written Fixed Borrowing Request
Exhibit D Form of Closing Certificate
Exhibit E Form of Federal Reserve Form FR U-1
Exhibit F Form of Compliance Certificate
Exhibit G Form of Security Agreement
Exhibit H Form of Control Agreement
Exhibit I Form of Applicable Margin Change Notice
Exhibit J Form of Commitment Fee Change Notice
Exhibit K Form of Commitment Termination Notice

iii

 

CREDIT AGREEMENT, dated as of May 17, 2016 between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation and The Bank of Nova Scotia.

 

The parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1Defined Terms

 

As used in this Credit Agreement, the following terms have the meanings specified below:

 

ABR Loan” means a Loan (or any portion thereof) bearing interest based on the Alternate Base Rate.

 

Adjusted Asset Coverage” means, as of any date, the ratio on such date of (a) Adjusted Total Net Assets to (b) the greater of (i) Adjusted Senior Debt, and (ii) one Dollar ($1).

 

Adjusted LIBO Rate” means, with respect to any LIBOR Loan for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

Adjusted Senior Debt” means, as of any date, the sum (without duplication) of each of the following on such date: (a) all Senior Debt plus (b) all Financial Contract Liabilities, plus (c) all Secured Liabilities, plus (d) all Segregated Liabilities.

 

Adjusted Total Net Assets” means, as of any date (a) Total Net Assets, minus (b) the sum (without duplication) of the following: (i) the value of all Excluded Assets (but not less than zero), plus (ii) the value of all Excluded Investments (but not less than zero), plus (iii) the excess, if any, of (1) the value of all of the Borrower’s assets (other than Excluded Assets) that are subject to any Lien (other than an Ordinary Course Lien), that are segregated, or that are on deposit to satisfy margin requirements, minus (2) the sum of all Secured Liabilities (excluding, to the extent otherwise included therein, liabilities of the Borrower under the Loan Documents) and all Segregated Liabilities.

 

Affected Person” means the Borrower, any subsidiary thereof, or any officer, director, Affiliate (other than another portfolio company of the Investment Adviser) or, to the Borrower’s knowledge, any employee of the Borrower or any such subsidiary, or any agent of the Borrower or any such subsidiary that will act in any capacity with respect to this Agreement.

 

Affiliate” of a Person means (a) any other Person directly or indirectly owning, controlling, or holding with power to vote, greater than 50% of the outstanding voting securities of such Person, (b) any other Person greater than 50% of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such Person, or (c) any Person directly or indirectly controlling, controlled by, or under common control with, such other Person. For purposes of this defined term, “control” means the power to exercise a controlling  influence over the management or policies of a company, and “controlling” and “controlled” shall have correlative meanings.

 

Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) 2.0% plus the Federal Funds Effective Rate in effect on such day, or (c) 2.0% plus the Overnight Eurodollar Rate in effect on such day. Any change in the Alternate Base Rate due to a change in the Federal Funds Effective Rate, the Overnight Eurodollar Rate or the Prime Rate, shall be effective from and including the effective date of such change in the Federal Funds Effective Rate, the Overnight Eurodollar Rate or the Prime Rate.

 

Anti-Corruption Law” means, with respect to any Affected Person, the FCPA and any law, rule or regulation of any jurisdiction concerning or relating to bribery or corruption that are applicable to such Affected Person.

 

Anti-Terrorism Law” means, with respect to any Person, any applicable law, rule or regulation related to financing terrorism including (a) the Patriot Act, (b) The Currency and Foreign Transactions Reporting Act (31 U.S.C. §§ 5311-5330) (also known as the “Bank Secrecy Act”), (c) the Trading With the Enemy Act (50 U.S.C. § 1 et seq.), (d) the International Economic Emergency Powers Act (15 U.S.C. § 1701 et seq.) and (e) Executive Order 13224 (effective September 24, 2001).

 

Applicable Accounting Principles” means, with respect to the Borrower, those accounting principles required by the ICA and prescribed by the SEC for the Borrower and, to the extent not so required or prescribed, GAAP.

 

Applicable Margin” means (a) during the Initial Margin Period, a rate per annum equal to (i) with respect to each ABR Loan, 0.00%, and (ii) with respect to each Fixed Rate Loan, each LIBOR Loan and each Overnight Loan, 0.80% and (b) during each Subsequent Margin Period, if any, a rate per annum equal to (i) with respect to each ABR Loan, the “New Applicable ABR Margin” (as defined in the Applicable Margin Change Notice in respect of the Applicable Margin Change Effective Date which is the first day of such Subsequent Margin Period), (ii) with respect to each Fixed Rate Loan, the “New Applicable Fixed Rate Margin” (as defined in the Applicable Margin Change Notice in respect of the Applicable Margin Change Effective Date which is the first day of such Subsequent Margin Period), (iii) with respect to each LIBOR Loan, the “New Applicable LIBOR Margin” (as defined in the Applicable Margin Change Notice in respect of the Applicable Margin Change Effective Date which is the first day of such Subsequent Margin Period), and (iv) with respect to each Overnight Loan, the “New Applicable Overnight Margin” (as defined in the Applicable Margin Change Notice in respect of the Applicable Margin Change Effective Date which is the first day of such Subsequent Margin Period).

 

Applicable Margin Change Effective Date” has the meaning set forth in Section 2.9(a).

 

Applicable Margin Change Notice” means a notice from the Bank to the Borrower substantially in the form of Exhibit I.

2

 

Applicable Money Market” means the London interbank market applicable to LIBOR Loans.

 

Applicable Rate” means, with respect to each (a) ABR Loan, the Alternate Base Rate plus the Applicable Margin, (b) Fixed Rate Loan, the Fixed Rate therefor plus the Applicable Margin, (c) LIBOR Loan, the Adjusted LIBO Rate plus the Applicable Margin, and (d) Overnight Loan, the One-month Eurodollar Rate plus the Applicable Margin.

 

Approved Amount” means (a) in connection with any borrowing, conversion, continuation or prepayment of a LIBOR Loan, $1,000,000 or an integral multiple of $1,000,000 in excess thereof, (b) in connection with any borrowing of, or conversion into, a Fixed Rate Loan, $5,000,000 or an integral multiple of $1,000,000 in excess thereof, or (c) in connection with any borrowing or prepayment of any other Loan, $1,000,000 or an integral multiple of $1,000,000 in excess thereof.

 

Asset-backed Security” means a type of bond or note that is based on one or more pools of assets, or collateralized by the cash flows from one or more pools of underlying assets, and includes collateralized bond obligations, collateralized loan obligations, collateralized mortgage obligations, and credit linked notes.

 

Bank” means The Bank of Nova Scotia.

 

Bank Loan” means a debt obligation customarily referred to as a “bank loan” other than (a) a security (as defined in the Securities Act), and (b) any participation or sub-participation in a debt obligation.

 

Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA that is subject to ERISA and which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of an ERISA Group.

 

Board” means the Borrower’s board of directors.

 

Board of Governors” means the Board of Governors of the Federal Reserve System of the United States of America.

 

Borrower” means Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation.

 

Borrowing Request” means a request in accordance with Section 2.2 or Section 2.3 for a Loan or a conversion or continuation of a Loan and, if required in writing, in the form of Exhibit C-1 or C-2, as applicable.

 

Breakage Event” has the meaning set forth in Section 3.7(b).

 

Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed, provided that, when used in connection with a LIBOR Loan or the determination of the One-month Eurodollar Rate or the Overnight Eurodollar Rate, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market.

3

 

Change in Circumstance” means any Change in Law that shall (a) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, the Bank or (b) impose on the Bank or any Applicable Money Market any other condition affecting this Credit Agreement or any Loan. A change in tax rates shall not be a “Change in Circumstances”.

 

Change in Law” means (a) the adoption of any law, rule or regulation after the date hereof, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date hereof or (c) compliance by the Bank (or, for purposes of Section 3.3(b), by any lending office of the Bank or by the Bank’s holding company) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date hereof; provided that for purposes of this Credit Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act, all requests, rules, guidelines or directives in connection therewith and all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States financial regulatory authorities, shall be deemed to have been adopted and become effective after the date hereof. A change in tax rates shall not be a “Change in Law”.

 

Code” means the Internal Revenue Code of 1986.

 

Commitment” means, as of any date, the commitment of the Bank hereunder to make Loans to the Borrower in an aggregate principal amount not exceeding $60,000,000 at any one time outstanding, as such commitment may be reduced from time to time pursuant to Section 2.4.

 

Commitment Fee Change Effective Date” has the meaning set forth in Section 2.9(b).

 

Commitment Fee Change Notice” means a notice from the Bank to the Borrower substantially in the form of Exhibit J.

 

Commitment Fee Rate” means (a) during the Initial Fee Period, a rate per annum equal to (i) as of any date upon which the Loan Balance equals or exceeds 70% of the Commitment, 0.0%, and (ii) as of any other date, 0.20%, and (b) during each Subsequent Fee Period, if any, a rate per annum equal to the “New Commitment Fee Rate” (as defined in the Commitment Fee Change Notice in respect of the Commitment Fee Change Effective Date which is the first day of such Subsequent Fee Period).

 

Commitment Termination Date” means the earlier to occur of (a) the Commitment Termination Notice Effective Date and (b) such earlier date on which the Bank’s obligations to make Loans shall have otherwise terminated or been terminated in accordance herewith.

4

 

Commitment Termination Notice” means a notice from the Bank to the Borrower substantially in the form of Exhibit K hereto.

 

Commitment Termination Notice Effective Date” means the 179th day after the date of delivery of the first Commitment Termination Notice given pursuant to Section 2.4(d) hereof.

 

Control Agreement” has the meaning set forth in Section 5.1(g).

 

Custodian” means U.S. Bank National Association, in its capacity as custodian under the Custody Agreement.

 

Custody Agreement” means the Custody Agreement, dated as of July 28, 2009, by and between the Borrower and U.S. Bank National Association, in its capacity as custodian thereunder.

 

Default” means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

Delayed Settlement Loan Collateral” means, as of any date, any Investment of the Borrower in a Bank Loan with respect to which the Borrower has entered into a sale or trade and such sale or trade has not, (a) in the case of any Bank Loan trading on “par documents”, settled within fourteen (14) Business Days of the date of such sale or trade, or (b) in the case of any other Bank Loan, settled within twenty-one (21) Business Days of the date of such sale or trade.

 

Dollars” or “$” refers to lawful money of the United States of America.

 

Effective Date” has the meaning set forth in Section 5.1.

 

ERISA” means the Employee Retirement Income Security Act of 1974.

 

ERISA Group” means, with respect to any Person, such Person and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with such Person, are treated as a single employer under Section 414 of the Code.

 

Event of Default” has the meaning assigned to such term in Section 8.1.

 

Excluded Assets” means, with respect to the Borrower, (a) all commercial tort claims, cooperative interests, goods, letter-of-credit rights and letters of credit, (b) all property other than Investments, (c) all deferred organizational and offering expenses, (d) all Investments that are in default (except to the extent that the Borrower is required or permitted to attribute a value thereto pursuant to the ICA, the rules thereunder and Applicable Accounting Principles) or determined to be worthless pursuant to any applicable policy of the Borrower, and (e) all property of the Borrower in which the Bank does not have a security interest that has been perfected in accordance with the terms of, and that has the requisite priority required by, the Security Agreement.

5

 

Excluded Investments” means as of any date and with respect to each of the following Investments (other than Excluded Assets) of the Borrower:

 

(a)           the excess, if any, of (i) the sum (without duplication) of (x) the aggregate Value of all Illiquid Investments, plus (y) the aggregate Value of all Level III Assets over (ii) an amount equal to 10% of Total Net Assets;

 

(b)           the excess, if any, of (i) the Value of all Delayed Settlement Loan Collateral over (ii) an amount equal to 5% of Total Net Assets;

 

(c)           the excess, if any, of (i) the Value of all Investments (other than (x) debt of the United States of America, and (y) shares in any Money Market Fund) in respect of which any single Person is the Issuer, over (ii) an amount equal to 7.5% of Total Net Assets;

 

(d)           after giving effect to paragraph (c) immediately above, the excess, if any, of (i) the Value of all Investments (other than (x) debt of the United States of America, and (y) shares in any Money Market Fund) in respect of which any single Person (other than, at any time, up to three (3) Persons) is the Issuer, over (ii) an amount equal to 5.0% of Total Net Assets;

 

(e)           the aggregate Value of (i) all Private Label Asset-backed Securities that are not rated BBB- or higher by S&P or Baa3 or higher by Moody’s, (ii) all collateralized debt obligations, and (iii) all collateralized loan obligations;

 

(f)            the excess, if any, of the aggregate Value of (i) all Private Label Asset-backed Securities that are rated BBB- or higher by S&P or Baa3 or higher by Moody’s, over (ii) an amount equal to 15% of Total Net Assets;

 

(g)           the aggregate Value of all Investments of the Borrower in any equity security (other than shares in any Money Market Fund) that is not traded on a recognized national securities exchange;

 

(h)          the aggregate Value of all Investments of the Borrower in sovereign debt of any Restricted Nation or any political subdivision thereof;

 

(i)            the excess, if any, of (i) the aggregate Value of all Investments of the Borrower with respect to all Persons organized under the laws of any single Limited Nation, over (ii) an amount equal to 15% of Total Net Assets; and

 

(j)            the excess, if any, of (i) the aggregate Value of all Investments of the Borrower denominated in the official currency (other than Euros) of any single Limited Nation, over (ii) an amount equal to 15% of Total Net Assets.

6

 

FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Credit Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof (provided such regulations or official interpretations are substantively comparable and not materially more onerous to comply with).

 

FCPA” means the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

 

Federal Funds Effective Rate” means, for any day, a rate per annum (expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the higher of (i) 0.0% and (ii) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the Business Day succeeding such next preceding Business Day, and (b) if such rate is not so published for any day, the Federal Funds Effective Rate for such day shall be the average of the quotations for such day on such transactions received by the Bank.

 

Federal Reserve Form” means a Form FR U-1 duly completed by the Bank and executed by the Borrower, the statements made in which shall, in the reasonable opinion of the Bank, permit the transactions contemplated hereby in compliance with Regulation U, together with all instruments, certificates and other documents executed or delivered in connection therewith or attached thereto.

 

Financial Contract” means (a) any rate, basis, commodity, currency, debt, equity or other swap or swaption, (b) any put, cap, collar or floor agreement, (c) any rate, basis, commodity, currency, debt, equity or other futures or forward agreement, (d) any rate, basis, commodity, currency, debt, equity or other option, (e) any derivative, (f) any financial instrument whose value is derived from the value of something else, (g) any contract under which the parties agree to payments between or among them based upon the value of an underlying asset or other data at a particular point or points in time, (h) any “swap agreement” within the meaning of Section 101(53B) of the Bankruptcy Code of the United States, (i) any foreign currency contract, repurchase agreement, reverse repurchase agreement, dollar roll, credit-linked note, indexed security, collateralized debt obligation, firm or standby commitment agreement, securities lending agreement, or when-issued contract, and (j) any other similar arrangement.

 

Financial Contract Liability” means, as of any date and with respect to each Financial Contract, the liability of the Borrower in respect of such Financial Contract determined on a mark-to-market basis, provided that if for purposes of financial reporting such liability or other obligation is required to be reported by the Borrower on a notional basis, then such liability will be the notional amount of such Financial Contract.

 

Fixed Period” has the meaning set forth in Section 2.3(a).

7

 

Fixed Rate” means, with respect to a Fixed Rate Loan, the fixed rate of interest applicable to such Fixed Rate Loan as pursuant to Section 2.3(a).

 

Fixed Rate Breakage Amount” means, with respect to any Breakage Event with respect to a Fixed Rate Loan, an amount equal to such amount as may be reasonably determined by the Bank (and the Bank agrees to endeavor to consult with the Borrower in making such determination), to be (a) the gain, if any, to the Bank arising out of such Breakage Event, determined as of the date thereof, minus (b) the positive sum, if any, of all loss, cost and expense to the Bank (other than any such loss, cost or expense relating to the loss of the anticipated Applicable Margin relating to such Fixed Rate Loan) arising out of such Breakage Event, determined as of the date thereof.

 

Fixed Rate Loan” means any Loan bearing interest based on a Fixed Rate.

 

Floating Rate Loan” means an ABR Loan or an Overnight Loan.

 

Foreign Lender” means, in the event the Bank is not a “United States person” within the meaning of Section 7701(a)(30) of the Code, the Bank.

 

Fundamental Policies” means, collectively, (i) the policies and objectives for, and limits and restrictions on, investing by the Borrower set forth in its Offering Document as in effect on the Effective Date and which may be changed only by a vote of a majority of the Borrower’s outstanding voting securities (as defined in Section 2(a)(42) of the ICA), and (ii) all policies limiting the incurrence of Indebtedness by the Borrower set forth in its Offering Document as in effect on the Effective Date.

 

GAAP” means generally accepted accounting principles in the United States of America.

 

Governmental Authority” means the government of the United States of America or any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, arbitrator, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

GSE” means the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Government National Mortgage Association.

 

GSE Asset-backed Security” means an Asset-backed Security the timely payment of interest and principal thereon when due is guaranteed by a GSE or the United States of America.

 

Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guaranteed” has a meaning correlative thereto.

8

 

ICA” means the Investment Company Act of l940.

 

Illiquid Investment” means, as of any date, any Investment that has any material condition to or restriction on the ability of the Borrower or any assignee to sell, assign, transfer, pledge, hypothecate or otherwise encumber or liquidate the same in a commercially reasonable time and manner (other than customary securities law arrangements or restrictions), whether or not such condition or restriction is intrinsic to such investment, including without limitation, with respect to each Investment other than a Bank Loan, any condition or restriction that could reasonably be expected to (i) prohibit or delay the settlement of any such sale, assignment, transfer, pledge, hypothecation, encumbrancing or liquidation for more than seven (7) days, or (ii) require any payment (other than a nominal amount) in connection therewith, shall be deemed to be such a material condition or restriction, and in the event that the Borrower enters into any arrangement pursuant to which any Investment (other than a Bank Loan) is to be sold or otherwise transferred by the Borrower and such sale or transfer is not settled within seven (7) days, such investment shall be deemed to be an Illiquid Investment.

 

Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by or otherwise in respect of bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (h) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (i) all Financial Contract Liabilities of such Person, (j) all obligations of such Person in respect of Senior Securities Representing Indebtedness, and (k) all Guarantees by such Person of any of the foregoing. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

Indemnified Taxes” means any Taxes, levies, imposts, duties, charges, fees, deductions or withholdings of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein other than (a) net income taxes (however denominated), franchise taxes (imposed in lieu of net income taxes), branch profits taxes and any other similar taxes imposed upon the Bank (or its applicable lending office) by the jurisdiction under the laws of which the Bank (or its applicable lending office) is organized or in which its principal office is located or through which it holds the Loans or any political subdivision, taxing authority or other authority thereof or therein, (b) any taxes imposed as a result of a present or former connection between the Bank (or its applicable lending office) and the jurisdiction imposing such tax other than a connection arising solely as a result of the Bank (or its applicable lending office) having executed, delivered or performed its obligations or received payments under, or enforced, this Credit Agreement, or (c) any U.S. Federal withholding taxes imposed under FATCA.

9

 

Indemnitee” has the meaning assigned to such term in Section 9.3(b).

 

Initial Fee Period” means the period from the Effective Date to but excluding the first Commitment Fee Change Effective Date, if any.

 

Initial Margin Period” means the period from the Effective Date to but excluding the first Applicable Margin Change Effective Date, if any.

 

Indirect Fund” means an investment company (the “acquiring company”) that beneficially owns (a) in excess of 3.0% of the voting stock of any other investment company (other than a money market fund), (b) one or more securities, issued by another investment company (other than a money market fund), the aggregate value of which exceed 5.0% of the total assets of the acquiring company, or (c) one or more securities, issued by other investment companies (other than money market funds), the aggregate value of which exceed 10.0% of the total assets of the acquiring company.

 

Interest Payment Date” means (a) with respect to each ABR Loan, each Fixed Rate Loan and each Overnight Loan, the last Business Day of each calendar quarter, (b) with respect to each LIBOR Loan, the last day of the Interest Period applicable to such LIBOR Loan and, in the case of a LIBOR Loan with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, and (c) with respect to all Loans, the Commitment Termination Date.

 

Interest Period” means, with respect to any LIBOR Loan, the period commencing on the date of the making of such LIBOR Loan (or the last date upon which any other Loan was converted to, or continued as, such LIBOR Loan) and ending on the numerically corresponding day in the calendar month that is one, two, three, or six months thereafter, in each case as the Borrower may elect, provided that, (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.

10

 

Investment” means, with respect to any Person, any direct or indirect portfolio investment by such Person in, or portfolio exposure (including through Financial Contracts) of such Person to (a) currencies, commodities, loans or securities, or any indexes on currencies, commodities, loans, securities, interest rates, or indexes, (b) any Financial Contract, or (c) any other medium for investment.

 

Investment Adviser” means, with respect to the Borrower, the investment adviser or investment manager therefor.

 

Level III Asset” means, at any time, any Investment of the Borrower (a) for which there are no Level 1 Inputs or Level 2 Inputs (in each case within the meaning of Topic ASC 820), or (b) the value of which is determined by reference to Level 3 Inputs (within the meaning of Topic ASC 820).

 

LIBO Rate” means, with respect to any LIBOR Loan for any Interest Period, the higher of (a) 0.0%, and (b) the rate appearing on the Reuters “LIBOR01” screen displaying interest rates for Dollar deposits in the London interbank market (or on any successor or substitute page on such screen) at approximately 11:00 a.m., London time two Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits in the London interbank market with a maturity comparable to such Interest Period, provided that in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the “LIBO Rate” with respect to such LIBOR Loan during such Interest Period shall be determined by reference to such other comparable publicly available service for displaying interest rates applicable to Dollar deposits in the London interbank market as may be selected by the Bank, provided further that in the absence of such availability, the “LIBO Rate” shall be determined by reference to the rate at which Dollar deposits of $1,000,000 in immediately available funds for a maturity comparable to such Interest Period are offered by the principal office of the Bank to leading banks in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, provided further that in the event the principal office of the Bank is not making such offers, “LIBO Rate” shall mean such other rate reflecting the Bank’s cost of funds as determined by the Bank using any reasonable or prevailing method.

 

LIBOR Loan” means a Loan (or any portion thereof) bearing interest based on the Adjusted LIBO Rate.

 

Lien” means, with respect to (a) any asset, (i) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, and (ii) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset, and (b) any securities, any purchase option, call or similar right of a third party.

 

Limited Nation” means any nation other than an Unlimited Nation.

 

Loan” means a loan made pursuant to Section 2.2 or Section 2.3.

 

Loan Balance” means, on any date of determination, an amount equal to the aggregate outstanding principal balance of the Loans.

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Loan Documents” means this Credit Agreement, the Security Documents, the Note, and all other agreements, certificates and other documents executed and delivered pursuant to any of the foregoing evidencing or securing the obligations of the Borrower hereunder or thereunder, together with all amendments, supplements or other modifications thereto.

 

Margin Stock” has the meaning assigned to such term in Regulation U.

 

Material Adverse Effect” means a material adverse effect on (a) the property, assets, income or financial condition of the Borrower, (b) the ability of the Borrower to perform any of its monetary or other material obligations under any Loan Document or (c) the rights of, or benefits available to, the Bank under any Loan Document.

 

Material Indebtedness” means Indebtedness of the Borrower (other than Indebtedness under the Loan Documents) in an aggregate principal amount exceeding the Threshold Amount.

 

Maturity Date” means the earlier to occur of (a) the Commitment Termination Date, and (b) the date on which the outstanding principal balance of the Loans shall become due and payable in accordance herewith.

 

Maximum Borrowing Value” means, at any time with respect to the Borrower’s assets constituting (a) Margin Stock, the “current market value” (within the meaning of Regulation U) thereof at such time, and (b) Non-Margin Assets, the “good faith loan value” (within the meaning of Regulation U) thereof at such time, provided that, with respect to each Non-Margin Asset, until such time, if any, as the Bank shall have notified the Borrower in writing of the Bank’s reasonable determination of the good faith loan value of such Non-Margin Asset, the Borrower may assume that the good faith loan value of such Non-Margin Asset is equal to 85% of the book value thereof.

 

Measurement Date” means the date of the most recent audited financial statements of the Borrower which were delivered to the Bank prior to the date of this Credit Agreement.

 

Money Market Fund” means, as of any date, any open-end investment company registered under the ICA that meets the requirements of Rule 2a-7 under the ICA.

 

Moody’s” means Moody’s Investors Service, Inc.

 

Multiemployer Plan” means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA that is subject to ERISA and to which any member of an ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of such ERISA Group during such five year period.

 

Net Asset Value” means, at any time of determination, an amount equal to Adjusted Total Net Assets minus Adjusted Senior Debt.

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Non-Margin Assets” means assets of the Borrower which do not constitute Margin Stock, provided, that, for purposes of this definition, “Non-Margin Assets” shall not include “puts, calls or combinations thereof” within the meaning of Regulation U.

 

Non-Recourse Person” has the meaning assigned to such term in Section 1.4.

 

Note” means the promissory note, substantially in the form of Exhibit A, payable to the order of the Bank, including all replacements thereof and substitutions therefor.

 

OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

Offering Document” means the prospectus of the Borrower as amended from time to time through and including the Effective Date.

 

One-month Eurodollar Rate” means, with respect to any Overnight Loan as of any date, the higher of (a) 0.0%, and (b) the rate of interest per annum that appears on the Reuters LIBOR01 Page as of 11:00 a.m., London time, on such date (or, if such date is not a Business Day, the immediately preceding Business Day) as Interbank Rates (One-month) for Dollars, provided that in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the “One-month Eurodollar Rate” shall be determined by reference to such other comparable publicly available service for displaying one-month interest rates applicable to Dollar deposits in the London interbank market as may be selected by the Bank, provided further that in the absence of such availability, the “One-month Eurodollar Rate” shall be determined by reference to the rate at which one-month Dollar deposits of $1,000,000 in immediately available funds are offered by the principal office of the Bank to leading banks in the London interbank market at approximately 11:00 a.m., London time, on such date (or, if such date is not a Business Day, the immediately preceding Business Day), provided further that in the event the principal office of the Bank is not making such offers, “One-month Eurodollar Rate” shall mean such other rate reflecting the Bank’s one-month cost of funds as reasonably determined by the Bank using any reasonable or prevailing method.

 

Ordinary Course Lien” means any Lien referred to in Section 7.2(a), (b), (c), (d) or (e)(i).

 

Ordinary Liabilities” means, with respect to the Borrower as of any date, “all liabilities and indebtedness” (within the meaning of the first sentence of Section 18(h) of the ICA) of the Borrower other than (a) Senior Debt, (b) Financial Contract Liabilities, (c) Secured Liabilities, and (d) Segregated Liabilities.

 

Organization Documents” means, (a) with respect to any corporation, its certificate of incorporation or charter, and by-laws, (b) with respect to any partnership, its partnership agreement, (c) with respect to any limited liability company, its certificate of formation and limited liability company agreement, (d) with respect to any business trust or statutory trust, its certificate of trust, if any, and declaration of trust, and (e) with respect to any other Person, the counterpart documents thereof. 

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Overnight Eurodollar Rate” means, with respect to any ABR Loan as of any date, the higher of (a) 0.0%, and (b) the rate of interest per annum that appears on the Reuters LIBOR01 Page as of 11:00 a.m., London time, on such date (or, if such date is not a Business Day, the immediately preceding Business Day) as Interbank Rates (Overnight) for Dollars, provided that in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the “Overnight Eurodollar Rate” shall be determined by reference to such other comparable publicly available service for displaying overnight interest rates applicable to Dollar deposits in the London interbank market as may be selected by the Bank, provided further that in the absence of such availability, the “Overnight Eurodollar Rate” shall be determined by reference to the rate at which overnight Dollar deposits of $1,000,000 in immediately available funds are offered by the principal office of the Bank to leading banks in the London interbank market at approximately 11:00 a.m., London time, on such date (or, if such date is not a Business Day, the immediately preceding Business Day), provided further that in the event the principal office of the Bank is not making such offers, “Overnight Eurodollar Rate” shall mean such other rate reflecting the Bank’s overnight cost of funds as reasonably determined by the Bank using any reasonable or prevailing method.

 

Overnight Loan” means a Loan (or any portion thereof) bearing interest based on the One-month Eurodollar Rate.

 

Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

 

Permitted Investments” means all Investments of the Borrower, in each case (a) to the extent that the Borrower has the power and authority under its Organization Documents to invest therein, and (b) to the extent the investment therein, ownership thereof, or exposure thereto, by the Borrower is in conformity with the Offering Document.

 

Permitted Liens” means Liens permitted by Section 7.2.

 

Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

Plan” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (a) is maintained, or contributed to, by any member of an ERISA Group for employees of any member of an ERISA Group or (b) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of an ERISA Group for employees of any Person which was at such time a member of an ERISA Group.

 

Prime Rate” means the rate of interest per annum publicly announced from time to time by the Bank as its prime commercial lending rate; each change in the Prime Rate being effective from and including the date such change is publicly announced as being effective. The Prime Rate is not intended to be the lowest rate of interest charged by the Bank in connection with extensions of credit to borrowers.

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Private Label Asset-backed Security” means an Asset-backed Security other than a GSE Asset-backed Security or a U.S. Government Security.

 

Regulated Investment Company” has the meaning set forth in Section 851 of the Code.

 

Regulation D” means Regulation D of the Board of Governors as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

Regulation T” means Regulation T of the Board of Governors as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

Regulation U” means Regulation U of the Board of Governors as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

Regulation X” means Regulation X of the Board of Governors as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

Restricted Nation” means Greece, Ireland, Italy, Portugal and Spain.

 

Restricted Payment” means (a) any dividend or other distribution by the Borrower (whether in cash, securities or other property) with respect to any shares, units or other equity interests issued by the Borrower, and (b) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, by the Borrower on account of the purchase, redemption, retirement, acquisition, cancellation, defeasance, tender offer or other termination of any such shares, units or other equity interests; provided, however, that any dividend, distribution or other payment payable solely in shares of common stock of the Borrower shall not constitute a “Restricted Payment”.

 

S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw Hill Companies, Inc.

 

Sanctioned Jurisdiction” means, at any time, a country, region or territory which is the subject or target of country-based or region-based (not individual- or entity-based) Sanctions.

 

Sanctioned Person” means, at any time, any Person that is the subject or target of any Sanction.

 

Sanctions” has the meaning set forth in Section 4.15(a).

 

SEC” means the U.S. Securities and Exchange Commission and/or any other Governmental Authority succeeding to the functions thereof with respect to the ICA and the Securities Act.

15

 

Secured Liability” means each liability of the Borrower secured by a Lien on property (other than Excluded Assets).

 

Securities Act” means the Securities Act of 1933.

 

Security Agreement” has the meaning set forth in Section 5.1(f).

 

Security Documents” means the Security Agreement, the Control Agreement and each other agreement, instrument or other document executed or delivered pursuant thereto.

 

Segregated Liability” means each liability or other obligation of the Borrower relating to assets (other than Excluded Assets) that have been segregated or are otherwise subject to margin arrangements (including assets segregated by the Borrower to comply with Section 18 of the ICA with respect to Financial Contracts).

 

Senior Debt” means, as of any date, the aggregate amount of Senior Securities Representing Indebtedness of the Borrower.

 

Senior Security” has the meaning set forth in the first sentence of Section 18(g) of the ICA.

 

Senior Security Representing Indebtedness” has the meaning set forth in the first sentence of Section 18(g) of the ICA.

 

Status” has the meaning set forth in Section 4.16.

 

Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board of Governors to which the Bank is subject for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D). Such reserve percentages shall include those imposed pursuant to such Regulation D. LIBOR Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to the Bank under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

Subsequent Fee Period” means, with respect to any Commitment Fee Change Notice, the period commencing on the Commitment Fee Change Effective Date, if any, with respect to such Commitment Fee Change Notice to but excluding the earlier to occur of (a) the Commitment Termination Date (as in effect at the commencement of such period), or (b) the Commitment Fee Change Effective Date, if any, immediately succeeding such Commitment Fee Change Effective Date.

 

Subsequent Margin Period” means, with respect to any Applicable Margin Change Notice, the period commencing on the Applicable Margin Change Effective Date, if any, with respect to such Applicable Margin Change Notice to but excluding the earlier to occur of (a) the Commitment Termination Date (as in effect at the commencement of such period), or (b) the Applicable Margin Change Effective Date, if any, immediately succeeding such Applicable Margin Change Effective Date.

16

 

Taxes” means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

 

Threshold Amount” means the lesser of (a) 1.0% of the aggregate Net Asset Value of the Borrower, and (b) $1,000,000.

 

Total Net Assets” means, as of any date, (a) the “value of the total assets” (within the meaning of the first sentence of Section 18(h) of the ICA) of the Borrower less (b) the Ordinary Liabilities of the Borrower.

 

Transactions” means the (a) execution, delivery and performance by the Borrower of each Loan Document to which it is a party, (b) borrowing of the Loans and (c) use of the proceeds of the Loans.

 

Unlimited Nation” means (a) each G-10 country, (b) Australia, and (c) New Zealand.

 

U.S. Government Security” means any debt obligation, other than an Asset-backed Security, the timely repayment of the principal thereof, and interest thereon, is backed by the full faith and credit of the United States of America.

 

Value” means, as of any day of determination in respect of any Investment of the Borrower, the value of such Investment computed in the manner such value is required to be computed by the Borrower in accordance with the Borrower’s internal policies, GAAP and applicable law (including the ICA).

 

Variable Rate Loan” means an ABR Loan, a LIBOR Loan or an Overnight Loan.

 

Written Fixed Borrowing Request” means a request in accordance with Section 2.3 for a Fixed Rate Loan and, if required in writing, in the form of Exhibit C-2.

 

Written Variable Borrowing Request” means a request in accordance with Section 2.2 for a Variable Rate Loan and, if required in writing, in the form of Exhibit C-1.

 

1.2Terms Generally

 

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any definition of or reference to any law, rule or regulation shall be construed as referring to such law, rule or regulation as from time to time amended and any successor thereto and in the case of such law, the rules and regulations promulgated from time to time thereunder, (c) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Credit Agreement in its entirety and not to any particular provision hereof, and (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Credit Agreement.

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1.3Accounting Terms

 

As used in the Loan Documents and in any certificate, opinion or other document made or delivered pursuant thereto, accounting terms not defined in Section 1.1, and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under Applicable Accounting Principles. If at any time any change in Applicable Accounting Principles would affect the computation of any financial ratio or requirement set forth in this Credit Agreement and (a) the Borrower notifies the Bank that the Borrower objects to determining compliance with such financial ratio or requirement on the basis of Applicable Accounting Principles in effect immediately after such change becomes effective or (b) the Bank so objects, then the Borrower’s compliance with such ratio or requirement shall be determined on the basis of Applicable Accounting Principles in effect immediately before such change becomes effective, until either such notice is withdrawn by the Borrower or the Bank, as the case may be, or the Borrower and the Bank otherwise agree. Except as otherwise expressly provided herein, the computation of financial ratios and requirements set forth in this Credit Agreement shall be consistent with the Borrower’s financial statements required to be delivered hereunder.

 

1.4Non-Recourse Persons

 

The Bank hereby agrees for the benefit of each and every trustee, director, and officer of, and each record owner of any outstanding shares of, the Borrower (each a “Non-Recourse Person”) that (a) no Non-Recourse Person shall have any personal liability for any obligation of the Borrower under any Loan Document or other instrument or document delivered pursuant hereto or thereto; and (b) no claim against any Non-Recourse Person or any property thereof may be made for any obligation of the Borrower under any Loan Document or other instrument or document delivered pursuant hereto or thereto, whether for the payment of principal of, or interest on, the Loans or for any fees, expenses or other amounts payable by the Borrower hereunder or thereunder.

 

ARTICLE II 

THE CREDITS

 

2.1Commitment

 

Subject to the terms and conditions set forth herein, the Bank agrees to make loans to the Borrower from time to time during the period from the Effective Date through the Business Day immediately preceding the Commitment Termination Date, provided that immediately after giving effect thereto, the Loan Balance will not exceed the Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.

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2.2Variable Rate Loans

 

(a)           General Provisions. To request a Variable Rate Loan, the Borrower shall make a telephonic Borrowing Request to the Bank, not later than (i) in the case of a Floating Rate Loan, 1:00 p.m., Eastern time, on the Business Day of the proposed Loan, or (ii) in the case of a LIBOR Loan, 11:00 a.m., Eastern time, three (3) Business Days before the date of the proposed Loan. Such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Bank of a duly executed Written Variable Borrowing Request duly signed by or on behalf of the Borrower. Each such telephonic and Written Variable Borrowing Request shall specify: (A) the requested date for such Variable Rate Loan (which shall be a Business Day), (B) whether such Variable Rate Loan is to be an ABR Loan, a LIBOR Loan, or an Overnight Loan, (C) the amount of such Variable Rate Loan, which shall be an Approved Amount, and (D) with respect to each LIBOR Loan, the Interest Period therefor, provided that, if either (x) the Borrower shall fail to specify whether such requested Variable Rate Loan is to be an ABR Loan, a LIBOR Loan, or an Overnight Loan or (y) immediately after giving effect to the making of such requested Variable Rate Loan, there would be LIBOR Loans outstanding with in excess of three (3) different Interest Periods, then such requested Variable Rate Loan shall be made as an ABR Loan.

 

(b)           Optional Conversion or Continuation of Variable Rate Loans. Subject to Section 2.2(c), prior to the Maturity Date, the Borrower may elect to (i) convert all or any portion of a Variable Rate Loan to a different type of Variable Rate Loan, or (ii) continue all or any portion of a LIBOR Loan as a LIBOR Loan having an additional Interest Period, provided that, in each such case, the principal amount to be converted to or continued shall be in an Approved Amount. Each such election shall be made by the Borrower by a telephonic Borrowing Request to the Bank, shall be irrevocable and shall (A) be made not later than (x) in the case of a conversion of a Variable Rate Loan to, or the continuation of a Variable Rate Loan as, a LIBOR Loan, 11:00 a.m., Eastern time, three (3) Business Days before the date of the proposed conversion or continuation, or (y) in all other cases not later than 1:00 p.m., Eastern time, on the Business Day of the proposed conversion or continuation, (B) specify the following information (w) the amount of the Variable Rate Loan requested to be converted or continued, (x) the requested date for such conversion or continuation, which shall be a Business Day, (y) whether such Variable Rate Loan is to be converted into an ABR Loan, Overnight Loan or a LIBOR Loan, or continued as a LIBOR Loan, and (z) in the case of a Variable Rate Loan being converted into or continued as a LIBOR Loan, the Interest Period to be applicable thereto, and (C) be confirmed promptly by hand delivery or facsimile to the Bank of a duly executed Written variable Borrowing Request signed by or on behalf of the Borrower, provided that, if (x) prior to the expiration of the Interest Period applicable to an existing LIBOR Loan, the Borrower shall fail to timely elect to continue or convert such LIBOR Loan in accordance herewith, such LIBOR Loan shall, on the last day of such Interest Period, be automatically converted to an ABR Loan, and (y) if immediately after giving effect to any such requested conversion or continuation of any Variable Rate Loan, there would be Variable Rate Loans outstanding with in excess of three (3) different Interest Periods, then such Loan shall be converted to an ABR Loan.

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(c)           Other. Notwithstanding anything to the contrary herein contained, the Borrower’s right to make elections pursuant to Section 2.2(b) shall cease (i) upon notice by the Bank to the Borrower upon the occurrence or during the continuance of an Event of Default (other than an Event of Default under Section 8.1(h) or (i)) that the Borrower’s right to make elections pursuant to Section 2.2(b) has been terminated, and (ii) automatically and without notice upon the occurrence or during the continuance of an Event of Default under Section 8.1(h) or (i).

 

2.3Fixed Rate Loans

 

(a)           In order to borrow, or convert all or any part of a Variable Rate Loan into, a Fixed Rate Loan, the Borrower shall deliver to the Bank a Written Fixed Borrowing Request, duly signed by or on behalf of the Borrower, no later than 10:00 a.m., Eastern time, two (2) Business Days prior to the date of such requested borrowing or conversion, setting forth (i) the amount of the proposed Fixed Rate Loan, which shall be an Approved Amount, (ii) whether it is a new borrowing or a conversion of all or any part of any outstanding Variable Rate Loans, and (iii) the interest period to be used by the Bank to determine the applicable Fixed Rate, which may be between 1 year and 10 years (in increments of 1 year) or such other period mutually agreed to by the Bank and the Borrower (with respect to such Fixed Rate Loan, the “Fixed Period”). Immediately after the Borrower has delivered the Written Fixed Borrowing Request, the Borrower shall notify and confirm with the Bank by telephone the Bank’s receipt of the Written Fixed Borrowing Request. Promptly after receipt of such Written Fixed Borrowing Request and telephonic confirmation, the Bank shall endeavor to telephonically advise the Borrower by 3:30 p.m., Eastern time, on such date as to the actual Fixed Rate being offered at that moment as the Fixed Rate that would be applicable to such Fixed Rate Loan, and the Borrower shall, upon being so advised of such offer of such Fixed Rate, either confirm its acceptance or rejection of such Fixed Rate. Notwithstanding anything to the contrary contained herein, in the event the Borrower shall fail to either accept or reject such offer, such offer shall be conclusively be deemed to have been rejected.

 

(b)           Following acceptance of the proposed Fixed Rate by the Borrower in accordance with Section 2.3(a), the Bank shall send a written confirmation thereof to the Borrower (provided that the Bank’s failure so to do shall not affect the obligations of the Borrower hereunder).

 

(c)           To the extent the Borrower has not repaid a Fixed Rate Loan as of the earlier of (i) the last day of the Fixed Period therefor, or (ii) the date it has become due and payable, whether due to maturity, acceleration or otherwise, it shall be automatically converted to an ABR Loan on such date. Notwithstanding anything to the contrary herein contained, each Fixed Rate Loan shall be converted to an ABR Loan (i) upon notice by the Bank to the Borrower upon the occurrence or during the continuance of an Event of Default (other than an Event of Default under Section 8.1(h) or (i)), and (ii) automatically and without notice upon the occurrence or during the continuance of an Event of Default under Section 8.1(h) or (i).

 

(d)           Notwithstanding anything to the contrary herein contained, the Borrower’s right to make borrowings and/or conversions pursuant to this Section 2.3 shall cease (i) upon notice by the Bank to the Borrower upon the occurrence or during the continuance of an Event of  Default (other than an Event of Default under Section 8.1(h) or (i)) that the Borrower’s right to make elections pursuant to Section 2.3 has been terminated, and (ii) automatically and without notice upon the occurrence or during the continuance of an Event of Default under Section 8.1(h) or (i).

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2.4           Termination and Reduction of Commitment

 

(a)           Unless previously terminated, the Commitment shall terminate on the Commitment Termination Date.

 

(b)           The Borrower may at any time terminate, or from time to time reduce, without premium or penalty, the Commitment, provided that (i) the Borrower may not terminate or reduce the Commitment if, immediately after giving effect thereto and to any concurrent repayment of the Loans in accordance with Section 2.5 or 2.6, the outstanding principal balance of the Loans would exceed the Commitment, and (ii) each such reduction shall be in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000.

 

(c)           The Borrower shall notify the Bank of any election to terminate or reduce the Commitment under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable and any termination or reduction of the Commitment hereunder shall be permanent. Each termination or reduction of the Commitment shall be accompanied by the payment of accrued and unpaid commitment fees to the extent required by Section 3.2.

 

(d)           The Bank may at any time deliver to the Borrower a Commitment Termination Notice.

 

2.5Repayment of Loans

 

(a)           The Borrower hereby unconditionally promises to pay to the Bank the then unpaid principal amount of each Loan on the Maturity Date.

 

(b)          In the event that on any date, the Borrower shall fail to be in compliance with Section 7.7 for twenty (20) consecutive days, the Borrower shall immediately repay the Loans and take such other actions as may be necessary such that, immediately after giving effect to such repayment and other actions, the Borrower is in compliance with Section 7.7.

 

2.6Voluntary Prepayments

 

The Borrower shall have the right at any time and from time to time, without premium or penalty (but subject to Section 3.7), to prepay any Loan in whole or in part. The Borrower shall notify the Bank by telephone (confirmed by facsimile) of any prepayment hereunder not later than 2:00 p.m., Eastern time, (i) three Business Days prior to date of prepayment in the case of a LIBOR Loan, or (ii) one Business Day (or such shorter period as the Bank may agree) prior to the date of prepayment in all other cases. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Loan or portion thereof to be prepaid. Each partial prepayment of the Loans pursuant to this Section 2.6 shall be in an Approved Amount. Prepayments shall be accompanied by accrued and unpaid interest to the extent required by Section 3.1.

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2.7Payments Generally

 

The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal of Loans, interest, fees, or otherwise) prior to 2:00 p.m., Eastern time, on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date shall be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Bank at its office at 40 King Street West, Toronto, Ontario, Canada M5H 1H1, or such other office as to which the Bank may notify the Borrower. Except as may be otherwise provided in the defined term “Interest Period”, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars. If at any time insufficient funds are received by and available to the Bank from the Borrower to pay fully all amounts of principal of Loans, interest, fees and other amounts then due under the Loan Documents, such funds shall be applied to the obligations owing to the Bank: (i) first, to payment of such amounts (excluding principal, interest and fees), in such order as the Bank may choose, (ii) second, to such interest and fees then due, and (iii) third, to such principal of the Loans then due. All amounts paid under the Loan Documents shall not be refundable under any circumstances.

 

2.8Evidence of Debt

 

The Loans made by the Bank shall be evidenced by one or more accounts or records maintained by the Bank in the ordinary course of business. The accounts or records maintained by the Bank shall be conclusive absent manifest error of the amount of the Loans made by the Bank to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing under the Loan Documents. Upon the request of the Bank, the Borrower shall execute and deliver to the Bank a Note, which shall evidence the Loans in addition to such accounts or records.

 

2.9Pricing Changes

 

(a)           At any time and from time to time the Bank may send to the Borrower an Applicable Margin Change Notice, and such Applicable Margin Change Notice shall become effective on the date that is the later to occur of the following (such later date with respect to such Applicable Margin Change Notice, the “Applicable Margin Change Effective Date”): (i) the date specified as such in such Applicable Margin Change Notice, and (ii) the 179th day after the date of such Applicable Margin Change Notice.

 

(b)           At any time and from time to time the Bank may send to the Borrower a Commitment Fee Change Notice, and such Commitment Fee Change Notice shall become effective on the date that is the later to occur of the following (such later date with respect to such Commitment Fee Change Notice, the “Commitment Fee Change Effective Date”): (i) the date specified as such in such Commitment Fee Change Notice, and (ii) the 179th day after the date of such Commitment Fee Change Notice.

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ARTICLE III 

INTEREST, FEES, YIELD PROTECTION, ETC.

 

3.1Interest

 

(a)            Each Loan shall bear interest at a rate per annum equal to the Applicable Rate, provided that if an Event of Default has occurred and is continuing, then, so long as such Event of Default is continuing, (i) the principal balance of such Loan shall bear interest at a rate per annum equal to the Applicable Rate plus 2.00%, and (ii) all other amounts owing under the Loan Documents that are not paid when due, shall bear interest, after as well as before judgment, at a rate per annum equal to the Alternate Base Rate plus 2.00%.

 

(b)           Accrued and unpaid interest on each Loan shall be payable in arrears on each Interest Payment Date applicable thereto, provided that (1) interest accrued and unpaid pursuant to each of clauses (i) and (ii) of paragraph (a) of this Section shall be payable on demand, and (2) in the event of any repayment or prepayment of any Loan, accrued and unpaid interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. All interest hereunder shall be computed on the basis of a year of 360 days (provided that interest computed by reference to the Prime Rate shall be on the basis of a year of 365 or 366 days, as applicable) for the actual number of days elapsed (including the day a Loan is made but excluding the date of repayment). The Alternate Base Rate, the Federal Funds Effective Rate, the LIBO Rate, the One-month Eurodollar Rate, the Overnight Eurodollar Rate and the Prime Rate shall each be determined by the Bank in accordance with the provisions of this Credit Agreement, and such determination shall be conclusive absent manifest error.

 

3.2Fees

 

The Borrower shall pay to the Bank a commitment fee, at a rate per annum equal to the Commitment Fee Rate during the period from and including the date on which this Credit Agreement shall have become effective in accordance with Section 9.6 to but excluding the Commitment Termination Date, on the daily amount of the excess of the Commitment over the Loan Balance. Accrued and unpaid commitment fees shall be payable in arrears on the last Business Day of March, June, September and December of each year, each date on which the Commitment is reduced and on the date on which the Commitment terminates, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

3.3Increased Costs

 

(a)           If there shall occur any Change in Circumstance and the result thereof shall be (i) to increase the cost to the Bank of making or maintaining any Loan, or to reduce the amount of any sum received or receivable by the Bank from the Borrower under the Loan Documents (whether of principal, interest or otherwise), then the Borrower will pay to the Bank such amount as will compensate the Bank for such increased costs or reduced amount, or (ii) to increase the cost to the Bank of maintaining the Commitment, then the Borrower will pay to the Bank such amount as will compensate the Bank for such increased costs.

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(b)           If the Bank determines in good faith that any Change in Law regarding liquidity or capital requirements has or would have the effect of reducing the rate of return on the Bank’s capital or on the capital of the Bank’s holding company, as a consequence of this Credit Agreement or any Loan made by the Bank hereunder to a level below that which the Bank or the Bank’s holding company could have achieved but for such Change in Law (taking into consideration the Bank’s policies and the policies of the Bank’s holding company with respect to liquidity and capital adequacy), then from time to time the Borrower will pay to the Bank such additional amount or amounts as will compensate the Bank or the Bank’s holding company for (i) any such reduction suffered as a consequence of such Loan, and (ii) any other such reduction.

 

(c)           A certificate of the Bank setting forth the Bank’s reasonable good faith determination of the additional amount or amounts necessary to compensate the Bank or its holding company, as applicable, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The amount shown as payable on any such certificate shall be due within ten days after receipt thereof. In determining such additional amounts of compensation, the Bank will act reasonably and in good faith.

 

(d)           Failure or delay on the part of the Bank to demand compensation pursuant to this Section shall not constitute a waiver of the Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate the Bank pursuant to this Section for any increased costs or reductions incurred more than 90 days prior to the date that the Bank notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of the Bank’s intention to claim compensation therefor; and provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

3.4Taxes

 

(a)           All payments by the Borrower hereunder and under any of the other Loan Documents shall be made in Dollars, in each case without setoff or counterclaim and free and clear of and without deduction for any Taxes, unless the Borrower is required by law (as determined in the good faith discretion of the Borrower or its agent) to make such deduction or withholding. Subject to Section 3.4(b), if any Indemnified Taxes are required to be withheld with respect to any amount payable by the Borrower hereunder or under any of the other Loan Documents, the Borrower will pay to the Bank on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Bank to receive the same net amount which the Bank would have received on such due date had no such Indemnified Taxes been required to be withheld. The Borrower will deliver promptly to the Bank certificates or other valid vouchers for all Taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under such other Loan Document. If the Borrower reasonably believes that such Indemnified Taxes were not correctly or reasonably asserted, the Bank will use reasonable efforts to cooperate (at the sole cost and expense of the Borrower) with the Borrower to obtain a refund of such taxes (which shall be repaid to the Borrower so long as such efforts would not, in the good faith determination of the Bank, result in any material additional costs, expenses or risks or be otherwise disadvantageous to it). The Bank agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its applicable lending office if the making of such a change would avoid the need for, or reduce the amount of, any such amounts payable by the Borrower that may thereafter accrue and would not, in the reasonable judgment of the Bank, be otherwise disadvantageous to the Bank.

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(b)          Notwithstanding anything to the contrary contained in Section 3.4(a), the Borrower will not be required to make any additional payment to or for the account of the Bank with respect to any Indemnified Taxes under Section 3.4(a) (i) by reason of a breach by the Bank of any certification or representation set forth in any form furnished to the Borrower under Section 3.4(d), (ii) by reason of the Bank’s failure or inability to furnish under Section 3.4(d) an original or an extension or renewal of any form required under Section 3.4(d), or (iii) if such Indemnified Taxes are withholding taxes imposed on amounts payable to the Bank at the time the Bank became a party to this Credit Agreement (or designates a new lending office or changes its place of organization or principal office), except to the extent that the Bank’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts, from the Borrower with respect to such Indemnified Taxes pursuant to Section 3.4(a).

 

(c)           If the Bank determines, in its reasonable discretion, that it has received a refund of any taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to Section 3.4(a), it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under Section 3.4(a)), net of all out-of-pocket expenses of the Bank and without interest (other than any interest paid by the relevant governmental authority with respect to such refund); provided, that the Borrower, upon the request of the Bank, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant governmental authority) to the Bank in the event the Bank is required to repay such refund to such governmental authority. The Bank agrees, that upon the occurrence of any event giving rise to a tax as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to Section 3.4(a), it will use reasonable efforts to mitigate the effect of any such event, including by designating another lending office for any Loan affected by such event and by completing and delivering or filing any tax-related forms which would reduce or eliminate such tax or additional amounts.

 

(d)           (i)            If the Bank is not a Foreign Lender it shall deliver to the Borrower an original signed, properly completed IRS Form W-9 (or any successor form) certifying that the Bank is not subject to U.S. backup withholding tax, on or prior to the date on which the Bank becomes a party to this Credit Agreement, promptly upon the obsolescence, expiration, or invalidity of any form previously delivered by the Bank, and from time to time thereafter upon the request of the Borrower.

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(ii)           If the Bank is a Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document, the Bank (x)  shall deliver to the Borrower, at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by such applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding, and (y) if requested by the Borrower, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower, including without limitation, as will enable the Borrower to determine whether or not the Bank is subject to backup withholding or information reporting requirements. Without limiting the generality of the foregoing, in the event that (A) the Borrower is resident for tax purposes in the United States, and (B) the Bank is a Foreign Lender, the Bank shall deliver to the Borrower on or prior to the date on which the Bank becomes a party to this Credit Agreement (and promptly upon the obsolescence, expiration or invalidity of any form or certificate previously delivered by the Bank or from time to time thereafter upon the reasonable request of the Borrower), whichever of the following is applicable:

 

(1)         original signed and duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor form) claiming eligibility for benefits of an income tax treaty to which the United States is a party that reduces or eliminates withholding tax;

 

(2)           original signed and duly completed copies of Internal Revenue Service Form W-8ECI (or any successor form);

 

(3)           in the case in which the Bank is claiming the benefits of the exemption for portfolio interest under section 881(c) of the Internal Revenue Code, (x) a written certificate that the Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Internal Revenue Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 871(h)(3)(B) of the Internal Revenue Code, or (C) a “controlled foreign corporation” receiving interest from a related person within the meaning of section 881(c)(3)(C) of the Internal Revenue Code and (y) original signed and duly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (or any successor form); or

 

(4)           any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

 

(iii)          If a payment made to the Bank under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if the Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), the Bank shall deliver to the Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower as may be necessary for the Borrower to comply with its obligations under FATCA and to determine the Bank has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 3.4(d)(iii), “FATCA” shall include any amendments made to FATCA after the Effective Date.

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3.5Alternate Rate of Interest

 

If the Bank determines (which determination shall be conclusive absent manifest error) that, with respect to any existing or requested Fixed Rate Loan, LIBOR Loan or Overnight Loan (each an “Affected Loan”), by reason of one or more circumstances arising after the date hereof affecting such Applicable Money Market, adequate and reasonable means do not exist for ascertaining the rate of interest applicable to such Affected Loan, or that such rate of interest will not adequately and fairly reflect the cost to the Bank of making, maintaining, converting or continuing such Affected Loan because of (a) any change since the date hereof in any applicable law or governmental rule, regulation, order or directive (whether or not having the force of law) or in the interpretation or administration thereof or (b) other circumstances arising after the date hereof affecting the Bank or such Applicable Money Market, then the Bank may give notice thereof to the Borrower by telephone or facsimile and (i) upon the giving of such notice, each existing Affected Loan shall automatically be deemed converted into and redenominated as an ABR Loan and shall thereafter bear interest at a rate per annum equal to the Applicable Rate therefor, and (ii) until such notice is rescinded by the Bank, the Bank shall have no obligation to make any new Loan that would be an Affected Loan. The Bank agrees that promptly after it shall have determined, with respect to any notice given by it under this Section, that the circumstance or circumstances that gave rise to such notice with respect to an Affected Loan no longer exist, the Bank shall by notice to the Borrower rescind such notice with respect to such Affected Loan.

 

3.6Other LIBOR Provisions

 

Notwithstanding any other provision hereof, if any Change in Law shall make it unlawful for the Bank to make, continue or maintain any LIBOR Loan, to convert any other Loan to a LIBOR Loan, or to give effect to its obligations as contemplated hereby with respect to any LIBOR Loan, then, by written notice to the Borrower:

 

(a)           the Bank may, if such Change in Law makes it unlawful to make, continue or maintain, or convert any Loan to, a LIBOR Loan, declare that thereafter (for the duration of such unlawfulness) LIBOR Loans will not be made or continued, and Loans will not be converted into LIBOR Loans; and

 

(b)           the Bank may, if such Change in Law makes it unlawful to maintain LIBOR Loans, require that all outstanding LIBOR Loans be converted to ABR Loans, in which event all such LIBOR Loans shall be automatically converted to ABR Loans on the last day of the Interest Period applicable thereto or such earlier date if required by any Change in Law.

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3.7Break Funding Payments

 

(a)            LIBOR Loans. In the event of (i) the payment or prepayment (voluntary or otherwise) of any principal of any LIBOR Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (ii) the failure to borrow or continue any LIBOR Loan, or convert any Variable Rate Loan to a LIBOR Loan, on the date specified in any notice delivered pursuant hereto, or (iii) the conversion of any LIBOR Loan to an ABR Loan pursuant to Section 3.6(b), then, in any such event, the Borrower shall compensate the Bank for the loss, cost and expense attributable to such event. Such loss, cost or expense shall be deemed to include an amount determined by the Bank to be the excess, if any, of (x) the amount of interest that would have accrued on the principal amount of such LIBOR Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such LIBOR Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such LIBOR Loan), over (y) the amount of interest that would accrue on such principal amount for such period at the interest rate that the Bank would bid were it to bid, at the commencement of such period, for deposits in Dollars of a comparable amount and period from other banks in the London interbank market. A certificate of the Bank setting forth any amount or amounts that the Bank is entitled to receive pursuant to this Section 3.7(b) and the calculation thereof in reasonable detail shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Bank the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(b)           Fixed Rate Loans. In the event that (i) the Borrower shall have accepted the Bank’s offer of a Fixed Rate with respect to a particular proposed Fixed Rate Loan, and such Fixed Rate Loan was not made because either (x) the Borrower rejected such Fixed Rate Loan or the proceeds thereof, or (y) such Fixed Rate Loan was not advanced by the Bank because any condition precedent therefor set forth in Article V was not satisfied, or (b) for any reason any Fixed Rate Loan shall have been, prior to the end of the Fixed Period therefor, either repaid, prepaid or converted to a Variable Rate Loan (including, without limitation, as a result of the acceleration thereof in accordance with Section 8.2), then in any such case referred to in clause (i) or clause (ii) above (each a “Breakage Event”), the Bank shall promptly (and in any event within ten (10) Business Days thereafter) (A) determine the Fixed Rate Breakage Amount arising out of such Breakage Event, and (B) deliver a certificate thereof to the Borrower stating such Fixed Breakage Amount. In the event such Fixed Rate Breakage Amount is a positive number, such Fixed Rate Breakage Amount shall be paid to the Borrower by the Bank within two (2) Business Days after the delivery of such certificate to the Borrower. In the event such Fixed Rate Breakage Amount is a negative number, such Fixed Rate Breakage Amount shall be paid to the Bank by the Borrower within two (2) Business Days after the delivery of such certificate to the Borrower.

 

ARTICLE IV 

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Bank to enter into this Credit Agreement and make the Loans, the Borrower makes the following representations and warranties to the Bank: 

 

4.1Organization and Power

 

The Borrower (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (b) is duly qualified to do business and in good standing in each jurisdiction in which the failure to be so qualified could reasonably be expected to have a Material Adverse Effect. The Borrower has all requisite power and authority to own its property and to carry on its business as now conducted.

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4.2Authority and Execution

 

The Borrower has full legal power and authority to enter into, execute, deliver and perform the terms of the Loan Documents to which it is a party, all of which have been duly authorized by all proper and necessary action, and the Borrower is in full compliance with its Organization Documents. The Borrower has duly executed and delivered the Loan Documents to which it is a party.

 

4.3Binding Agreement

 

The Loan Documents constitute the valid and legally binding obligations of the Borrower to the extent it is a party thereto, enforceable in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally.

 

4.4Litigation

 

There are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority (whether purportedly on behalf of the Borrower) pending or, to the knowledge of the Borrower, threatened against it or maintained by it that may affect the property or rights of the Borrower, which (a) call into question the validity or enforceability of, or otherwise seek to invalidate, any Loan Document, or (b) would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

4.5Approvals and Consents

 

No consent, authorization or approval of, filing (other than the filing of each financing statement in the form attached to the Security Agreement in the office indicated on such financing statement) with, notice to, or exemption by, the holders of any securities issued by the Borrower, any Governmental Authority or any other Person is required to authorize, or is required in connection with, the execution and delivery by the Borrower of, and the performance by the Borrower of its obligations under, the Loan Documents to which it is a party or is required as a condition to the validity or enforceability of the Loan Documents to which it is a party with respect to or against the Borrower or its property or assets. No provision of any applicable treaty, statute, law (including any applicable usury or similar law), rule or regulation of any Governmental Authority will prevent the execution and delivery by the Borrower or performance by the Borrower of its obligations under, or affect the validity with respect to or against the Borrower of, the Loan Documents to which it is a party.

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4.6No Conflict

 

The Borrower is not in default under any mortgage, indenture, contract, agreement, judgment, decree or order to which it is a party or by which it or any of its property is bound, which defaults, taken as a whole, could reasonably be expected to have a Material Adverse Effect. The execution, delivery or carrying out by the Borrower of the terms of the Loan Documents to which it is a party, the Loans hereunder and the use by the Borrower of the proceeds thereof (a) will not (i) violate any statutes or regulations, including the ICA, of any Governmental Authority applicable to the Borrower or (ii) constitute a default under, conflict with, require any consent under (other than consents which have been obtained), or result in the creation or imposition of, or obligation to create, any Lien (other than pursuant to the Loan Documents) upon the property of the Borrower pursuant to the terms of any such mortgage, indenture, contract, agreement, judgment, decree or order, which defaults, conflicts and consents, if not obtained, could reasonably be expected to have a Material Adverse Effect, and (b) are not inconsistent with the Fundamental Policies.

 

4.7Taxes

 

The Borrower has filed or caused to be filed all tax returns required to be filed and has paid, or has made adequate provision for the payment of, all Taxes shown to be due and payable on said returns or in any assessments made against it (other than those being contested in good faith and by appropriate proceedings diligently conducted, and for which adequate reserves have been set aside in accordance with Applicable Accounting Principles) which, if not so filed or paid, could reasonably be expected to result in a Material Adverse Effect, and no tax Liens have been filed against the Borrower or any of its property. The charges, accruals and reserves on the books of the Borrower with respect to all federal, state, local and other Taxes are adequate, and the Borrower knows of no unpaid assessment which is due and payable against or any claims being asserted against it which could reasonably be expected to have a Material Adverse Effect, except such thereof as are being contested in good faith and by appropriate proceedings diligently conducted, and for which adequate reserves have been set aside in accordance with Applicable Accounting Principles.

 

4.8Compliance

 

The Borrower is not in default with respect to any judgment, order, writ, injunction, decree or decision of any Governmental Authority, which default could reasonably be expected to have a Material Adverse Effect. The Borrower is complying in all respects with all applicable statutes and regulations, including the ICA and the Securities Act, and of all Governmental Authorities, a violation of which could reasonably be expected to have a Material Adverse Effect.

 

4.9Property

 

The Borrower has good and marketable title to all of its property with respect to which the absence of such marketable title could reasonably be expected to result in a Material Adverse Effect, subject to no Liens other than Permitted Liens.

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4.10Federal Reserve Regulations; Use of Loan Proceeds

 

Except for the Federal Reserve Form to be executed and delivered by the Borrower, no filing or other action is required under the provisions of Regulations T, U or X in connection with the execution and delivery by the Borrower of this Credit Agreement and neither the making of any Loan in accordance with this Credit Agreement nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulations T, U or X.

 

4.11No Material Adverse Effect

 

Since the Measurement Date, the Borrower has conducted its businesses only in the ordinary course and there has been no event or occurrence that has resulted in a Material Adverse Effect.

 

4.12Material Agreements

 

Each of the following is in full force and effect: (a) the investment advisory agreement between the Borrower and its Investment Adviser, (b) the Custody Agreement, and (c) the administration agreement between the Borrower and the administrator therefor.

 

4.13Financial Condition

 

The statement of assets and liabilities of the Borrower as of the Measurement Date and the related statements of operations and changes in net assets for the fiscal year then ended, copies of which, certified by independent public accountants, have heretofore been delivered to the Bank, fairly present, in all material respects, the financial position of the Borrower as of such date and the results of its operations for such period in conformity with Applicable Accounting Principles.

 

4.14No Misrepresentation

 

No representation or warranty contained in any Loan Document and no certificate or report from time to time furnished by the Borrower to the Bank in connection with the transactions contemplated thereby, contains or will contain a misstatement of material fact, or, to the best knowledge of the Borrower, omits or will omit to state a material fact required to be stated in order to make the statements therein contained not misleading in the light of the circumstances under which made.

 

4.15Sanctions, Etc.

 

(a)           None of the Borrower, any of its subsidiaries or any director, officer, or, to Borrower’s knowledge, employee, agent, or affiliate of the Borrower (other than another portfolio company of the Investment Adviser) or any of its subsidiaries is a Person that is, or is owned or controlled by Persons that are: (i) the subject or target of any sanctions administered or enforced by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), or (ii) located, organized or resident in a country, region or territory that is, or whose government is, the subject of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan, Crimea and Syria.

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(b)           No Affected Person or any Person that controls (directly or indirectly) the Borrower, or any Person that receives (directly or indirectly) any proceeds of any Loan (i) conducts any business or engages in making or receiving any contribution of goods, services or money to or for the benefit of any Sanctioned Person or in any Sanctioned Jurisdiction, (ii) deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any Anti-Terrorism Law, (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iv) has violated any Anti-Terrorism Law.

 

(c)           No Affected Person or any Person that controls (directly or indirectly) the Borrower, or any Person that receives (directly or indirectly) any proceeds of any Loan (i) has engaged in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of prohibited offenses designated by the Organization for Economic Co-operation and Development’s Financial Action Task Force on Money Laundering, or (ii) otherwise violated any applicable law regarding money laundering in any material respect.

 

(d)           The Borrower and each subsidiary thereof is in material compliance with the FCPA, and each foreign counterpart thereof. Neither the Borrower nor any subsidiary thereof has made a payment, offering, or promise to pay, or authorized the payment of, money or anything of value (i) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (ii) to a foreign official, foreign political party or party official or any candidate for foreign political office, and (iii) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to the Borrower or any other Person in violation of the FCPA.

 

(e)           The Borrower and each Subsidiary thereof has implemented and maintains, and is in compliance with, policies and procedures designed to promote and achieve compliance by each Affected Person with all applicable laws regarding Sanctions and money laundering, Anti-Terrorism Laws and Anti-Corruption Laws.

 

4.16Investment Company Status

 

(a)           The Borrower has the following status (“Status”): (i) it qualifies as a Regulated Investment Company, (ii) it is a “registered investment company” within the meaning of Section 8 of the ICA, (iii) it is a “closed-end company” and a “non-diversified company” in each case within the meaning of Section 5 of the ICA, (iv) it is not a “business development company” within the meaning of Section 2(a)(48) of the ICA, (v) it is neither an “affiliate” (within the meaning of Section 23A of the Federal Reserve Act) of, nor an “affiliated person” (as defined in Section 2(a)(3) of the ICA) of, the Bank, (vi) it is not an Indirect Fund, (vii) it has only one series of capital stock, (viii) it is in compliance with the Fundamental Policies, and (ix) it is not a party to any inter-fund lending arrangement.

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(b)           The Borrower is not subject to any statute, rule, regulation or organizational or offering document which prohibits or limits the incurrence of Indebtedness under the Loan Documents, except for the limitations set forth in the ICA, state securities laws to the extent applicable, and the Fundamental Policies.

 

(c)           The Borrower has not issued any of its securities in violation of any Federal or State securities laws applicable thereto, except to the extent that any such violation could not reasonably be expected to have a Material Adverse Effect.

 

4.17ERISA

 

The Borrower (a) is not, and has not been in the last five (5) years, a member of an ERISA Group, and (b) has no liability in respect of any Benefit Arrangement, Plan or Multiemployer Plan subject to ERISA. None of the following (individually or collectively) constitute a “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code for which an exemption is not available: (i) the execution and delivery of the Loan Documents, (ii) the incurrence of any obligation under the Loan Documents, (iii) the making of any Loan, (iv) the payment by the Borrower of any principal, interest, fee or other sum owing under the Loan Documents, or (v) the consummation of any other transaction contemplated by the Loan Documents.

 

ARTICLE V 

CONDITIONS

 

5.1Effective Date

 

The obligation of the Bank to make Loans hereunder shall not become effective until the date (the “Effective Date”) on which each of the following conditions is satisfied, or waived in accordance with Section 9.2 (and the Bank shall notify the Borrower of the Effective Date, and such notice shall be conclusive and binding):

 

(a)           The Bank shall have received either (i) a counterpart of this Credit Agreement signed on behalf of the Borrower or (ii) written evidence satisfactory to the Bank (which may include facsimile transmission of a signed signature page of this Credit Agreement) that the Borrower has signed a counterpart of this Credit Agreement.

 

(b)           If the Bank shall have requested one, the Bank shall have received a Note, dated the Effective Date, executed on behalf of the Borrower.

 

(c)           The Bank shall have received a favorable written opinion (addressed to the Bank and dated the Effective Date) from external legal counsel to the Borrower acceptable to the Bank, the substance of which is set forth in Exhibit B. The Borrower hereby requests such counsel to deliver such opinion.

 

(d)           The Bank shall have received a certificate, dated the Effective Date and signed by authorized representatives of the Borrower, substantially in the form of Exhibit D hereto, and in all other respects satisfactory to the Bank.

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(e)            The Bank shall have received a copy of an initial Federal Reserve Form, substantially in the form of Exhibit E hereto, duly executed and delivered by or on behalf of the Borrower, in form and substance acceptable to the Bank.

 

(f)             The Bank shall have received a security agreement, dated the Effective Date and signed by an authorized representative on behalf of the Borrower, substantially in the form of Exhibit G hereto (the “Security Agreement”).

 

(g)            The Bank shall have received a control agreement, dated the Effective Date and signed by the Custodian and an authorized representative on behalf of the Borrower, substantially in the form of Exhibit H hereto (the “Control Agreement”).

 

(h)            The Bank shall have received Uniform Commercial Code, federal tax and judgment lien search reports with respect to each applicable public office where Liens would customarily be filed against the Borrower disclosing that there are no Liens of record in such official’s office covering the Borrower or any asset or property thereof.

 

(i)            Prior to or simultaneously with the Effective Date, (i) the Borrower shall have paid all principal, interest and other sums owing (whether or not then due) by the Borrower under the U.S. PB Agreement, dated September 25, 2014, between the Borrower and BNP Paribas Prime Brokerage, Inc. (the “Existing Lender”) and all other term annexes, agreements, instruments and other documents executed or delivered in connection therewith (collectively, the “Existing Credit Documents”), (ii) the Existing Credit Documents shall have been terminated (other than provisions thereof which, by their terms, provide that they survive any such termination), and all commitments under the Existing Credit Documents to make loans or otherwise extend credit to or for the account of the Borrower shall have been cancelled or terminated, (iii) all Liens on the property of the Borrower securing the obligations under the Existing Credit Documents shall have been released or otherwise terminated, and (iv) the Bank shall have received satisfactory evidence of all of the foregoing.

 

(j)            The Bank shall have received all fees and other amounts due and payable by the Borrower on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket costs and expenses required to be reimbursed or paid by the Borrower hereunder.

 

5.2Each Credit Event

 

The obligation of the Bank to make any Loan is subject to the satisfaction of the following conditions:

 

(a)            The representations and warranties of the Borrower set forth in each Loan Document to which it is a party shall be true and correct in all respects on and as of the date of such Loan (other than, as to any such representation or warranty that by its terms refers to a specific date, in which case such representation and warranty shall be true and correct in all respects as of such specified date), and no Default shall have occurred and be continuing.

 

(b)           The Bank shall have received (i) in connection with a Variable Rate Loan, a Written Variable Borrowing Request signed by the Borrower setting forth the information required by Section 2.2(a), or (ii) in connection with a Fixed Rate Loan, a Written Fixed Borrowing Request signed by the Borrower setting forth the information required by Section 2.3(a), and the Borrower’s acceptance of the Fixed Rate for such Fixed Rate Loan in accordance with Section 2.3(a).

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(c)           To the extent required by Regulation U, the Bank shall have received (i) a copy of a Federal Reserve Form, duly executed and delivered by the Borrower and completed for delivery to the Bank, in form acceptable to the Bank, or (ii) a current list of Margin Stock and Non-Margin Assets of the Borrower, in a form acceptable to the Bank and in all respects in compliance with Regulation U, including Section 221.3(c)(2)(iv) thereof.

 

Each request for a Loan by the Borrower shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraph (a) of this Section.

 

ARTICLE VI 

AFFIRMATIVE COVENANTS

 

Until the Commitment has expired or been terminated and the principal of and interest on each Loan and all fees and other amounts payable by the Borrower under the Loan Documents shall have been paid in full, the Borrower covenants and agrees with the Bank that:

 

6.1Financial Statements and Other Information

 

The Borrower shall, subject to the last paragraph of this Section, furnish or cause to be furnished to the Bank:

 

(a)           as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a copy of its statement of assets and liabilities as at the end of such fiscal year, together with the related schedule of investments and statements of operations and changes in net assets as of and through the end of such fiscal year; each such statement of assets and liabilities and the related schedule of investments and statements of operations and changes in net assets shall be certified without qualification by independent public accountants, which certification shall (i) state that the examination by such independent public accountants in connection with such financial statements has been made in accordance with those auditing standards required by the ICA and prescribed by the SEC for the Borrower or, to the extent not so required or prescribed, generally accepted auditing standards in the United States and (ii) include the opinion of such independent public accountants that such financial statements have been prepared in conformity with Applicable Accounting Principles, except as otherwise specified in such opinion;

 

(b)           as soon as available, but in any event within 90 days after the end of the first semiannual accounting period in each fiscal year of the Borrower, a copy of the Borrower’s statement of assets and liabilities as at the end of such semiannual period, together with the related schedule of investments and statements of operations and changes in net assets for such period;

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(c)           as soon as available, but in any event not later than 60 days after the end of each fiscal quarter in each fiscal year of the Borrower, a duly completed certificate of a duly authorized representative of the Borrower, substantially in the form of Exhibit F hereto;

 

(d)           as soon as available, but in any event not later than three (3) Business Days after the end of each calendar month, a duly completed certificate of a duly authorized representative of the Borrower, substantially in the form of Exhibit F hereto;

 

(e)           prompt written notice of any contest referred to in Sections 6.5 or 6.6;

 

(f)            promptly after the execution thereof, copies of all material amendments or other material changes to the Fundamental Policies, all investment advisory contracts, and any new investment advisory contracts entered into after the Effective Date;

 

(g)           prompt written notice in the event that the Board decides to seek the approval of Borrower’s shareholders to effect a change in any of Borrower’s Fundamental Policies; and

 

(h)           promptly after request therefor, such other information as the Bank may reasonably request from time to time (including, without limitation, in order to comply with “know-your-customer” and other anti-terrorism, anti-money laundering and similar rules and regulations and related policies).

 

Borrower shall not be required pursuant to Sections 6.1(a), (b) or (c) to deliver or otherwise provide any information to the Bank to the extent such information is readily available through the U.S. Securities and Exchange Commission’s EDGAR system or on the www.tortoiseadvisors.com website within the time period provided in such Section. Borrower shall not be required pursuant to Section 6.1(e), (f), or (g) to deliver or otherwise provide any information to the Bank to the extent such information is (i) readily available through the U.S. Securities and Exchange Commission’s EDGAR system or on the www.tortoiseadvisors.com website, and (ii) Borrower has notified the Bank that such information is available and where such information may be found.

 

6.2Notice of Material Events

 

The Borrower shall furnish or cause to be furnished to the Bank prompt written notice of the following, together with a statement of a duly authorized representative (who shall be acceptable to the Bank) of the Borrower setting forth in reasonable detail the event or development requiring such notice and, if applicable, any action taken or proposed to be taken with respect thereto:

 

(a)the occurrence of any Default;

 

(b)           the filing or commencement of any action, suit or proceeding by or before any Governmental Authority against or affecting the Borrower that could in the good faith opinion of the Borrower reasonably be expected to result in a Material Adverse Effect; and

 

(c)            the occurrence of any other development that has resulted, or could reasonably be expected to result, in a Material Adverse Effect.

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6.3Legal Existence

 

The Borrower shall maintain its legal existence in good standing in the jurisdiction of its organization and shall maintain its qualification to do business in each other jurisdiction in which the failure so to do could reasonably be expected to have a Material Adverse Effect.

 

6.4Insurance

 

The Borrower shall maintain insurance with financially sound insurance carriers in at least such amounts and against at least such risks as are customarily insured against by entities engaged in the same or a similar business or as may otherwise be required by the ICA or the SEC (including such fidelity bond coverage as shall be required by Rule 17g-1 promulgated under the ICA or any successor provision and errors and omissions insurance); and furnish to the Bank, upon written request, full information as to the insurance carried.

 

6.5Payment of Indebtedness and Performance of Obligations

 

The Borrower shall pay and discharge when due all lawful Indebtedness, obligations and claims for labor, materials and supplies or otherwise which, if unpaid, could reasonably be expected to (a) have a Material Adverse Effect on the Borrower or (b) give rise to the imposition of a Lien (other than a Permitted Lien) upon the property of the Borrower, unless and to the extent only that the validity of such Indebtedness, obligation or claim shall be contested in good faith and by appropriate proceedings diligently conducted by or on behalf of the Borrower, and provided that such reserve or other appropriate provision as shall be required in accordance with Applicable Accounting Principles shall have been made therefor.

 

6.6Observance of Legal Requirements

 

The Borrower shall observe and comply in all material respects with all laws (including the ICA and the Code), ordinances, orders, judgments, rules, regulations, certifications, franchises, permits, licenses, directions and requirements of all Governmental Authorities, which may then be applicable to the Borrower, a violation of which could reasonably be expected to have a Material Adverse Effect, except such thereof as shall be contested in good faith and by appropriate proceedings diligently conducted by or on behalf of the Borrower, provided that such reserve or other appropriate provision as shall be required in accordance with Applicable Accounting Principles shall have been made therefor.

 

6.7Books and Records; Visitation

 

The Borrower shall (a) keep proper books of record and account in which complete, true and correct entries in conformity with Applicable Accounting Principles and all material requirements of law shall be made of all material dealings and transactions in relation to its business and activities, (b) upon reasonable prior notice (which shall in no event be required to be more than (i) one Business Day prior, at any time that a Default has occurred and is continuing, or (ii) five Business Days prior, at all other times) permit representatives of the Bank to visit the offices of the Borrower and to discuss the properties, assets, income and financial condition of the Borrower with the duly authorized representatives thereof and to inspect the books, property and records of the Borrower, and (c) upon the reasonable request of the Bank, deliver to the Bank a detailed list of assets of the Borrower.

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6.8Purpose of Loans

 

The Borrower shall use the proceeds of each Loan for its general business purposes, including the purchase of investment securities, provided that in no event shall (a) the proceeds of any Loan be used for purposes which would violate any provision of any applicable statute, rule, regulation, order or restriction applicable to the Borrower or Regulation U or (b) the Borrower use the proceeds of any Loan for anything other than its general corporate or working capital purposes.

 

6.9Maintenance of Status

 

The Borrower will maintain at all times its Status.

 

ARTICLE VII 

NEGATIVE COVENANTS

 

Until the Commitment has expired or been terminated and the principal of and interest on each Loan and all fees and other amounts payable by the Borrower under the Loan Documents shall have been paid in full, the Borrower covenants and agrees with the Bank that:

 

7.1Indebtedness; Senior Securities

 

(a)The Borrower will not create, incur, assume or suffer to exist any liability for Indebtedness, except:

 

(i)Indebtedness under the Loan Documents,

 

(ii)           Indebtedness (other than Indebtedness for borrowed money) constituting Financial Contract Liabilities (1) incurred in the ordinary course of business, (2) permitted to be incurred in accordance with the Fundamental Policies, and (3) which, immediately after giving effect thereto and any simultaneous repayment of any other Indebtedness, would not cause the Borrower to be in Default under Section 7.7, and

 

(iii)          Indebtedness to the Custodian (1) incurred for the purposes of clearing and settling purchases and sales of securities, or (2) up to an aggregate amount not to exceed the lesser of (x) 1.0% of the aggregate Net Asset Value of the Borrower and (y) $3,000,000 at any one time outstanding under this clause (2), for temporary or emergency purposes.

 

(b)           The Borrower will not issue, sell, create, incur, assume or suffer to exist any Senior Security, except Senior Securities Representing Indebtedness permitted by Section 7.1(a).

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7.2Liens

 

The Borrower will not create, incur, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired, except:

 

(a)           Liens for Taxes, assessments or similar charges incurred in the ordinary course of business for which adequate reserves have been set aside in accordance with Applicable Accounting Principles and which (i) are not delinquent, or (ii) are being contested in good faith and by appropriate proceedings diligently conducted, provided that enforcement of such Liens is stayed pending such contest;

 

(b)           Liens imposed by law created in the ordinary course of business for which adequate reserves have been set aside in accordance with Applicable Accounting Principles (i) securing amounts not yet due, or (ii) which are being contested in good faith and by appropriate proceedings diligently conducted, provided that enforcement of such Liens is stayed pending such contest;

 

(c)            Liens arising out of judgments or decrees affecting the property attributable to the Borrower for which adequate reserves have been set aside in accordance with Applicable Accounting Principles and which are being contested in good faith and by appropriate proceedings diligently conducted, provided that enforcement thereof is stayed pending such contest;

 

(d)Liens created or arising under the Loan Documents;

 

(e)           (i) Liens arising under the Custody Agreement and securing obligations (other than Indebtedness) of the Borrower thereunder, to the extent such obligations arose in the ordinary course of business and are permitted by the Control Agreement, and (ii) Liens arising under the Custody Agreement and securing Indebtedness of the Borrower thereunder to the extent such Indebtedness is permitted by Section 7.1 and by the Control Agreement; and

 

(f)            Liens in respect of obligations arising from any Financial Contract, provided that each such obligation is incurred in the ordinary course of business and in accordance with the Fundamental Policies.

 

7.3Fundamental Changes

 

The Borrower will not (a) consolidate or merge into or with any Person, or (b) in any single transaction or series of related transactions, sell, lease or otherwise transfer, directly or indirectly, all or substantially all of its property.

 

7.4Restricted Payments

 

The Borrower will not declare, make or otherwise pay, or allow to be declared, made or otherwise paid, any Restricted Payment if (i) an Event of Default then exists or would result therefrom, and (ii) any Loan is then outstanding.

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7.5Fundamental Policies; Valuation

 

The Borrower will not (a) make or maintain any Investment other than as permitted by the ICA and the Fundamental Policies, (b) amend or otherwise modify the Fundamental Policies, or (c) for purposes of the Loan Documents or financial reporting, value any Investment or other property thereof other than in accordance with applicable law (including the ICA) and the Offering Document.

 

7.6Amendments and Changes

 

(a)           The Borrower will not amend or otherwise modify its Organization Documents or the Custody Agreement, in each case in any way which would adversely affect the rights or remedies of the Bank under the Loan Documents.

 

(b)           The Borrower will not change its fiscal year if such change would have a Material Adverse Effect. Subject to Section 1.3, the Borrower will not change or permit any change in the accounting principles applied to it, except as required by Applicable Accounting Principles, if such change would have a Material Adverse Effect.

 

7.7Financial Covenants

 

(a)           The Borrower will not permit the Adjusted Asset Coverage to be less than 3.00:1.00 at any time.

 

(b)           The Borrower shall not at any time permit (i) Senior Debt to exceed the maximum amount of Senior Debt that would be permitted to be incurred by or for the account of the Borrower under its Fundamental Policies, (ii) Senior Debt to exceed the maximum amount of Senior Debt that would be permitted to be incurred by or for the account of the Borrower on such date under the ICA or other applicable law, or (iii) its Indebtedness to exceed the sum of (A) 50% of (x) the Maximum Borrowing Value of the Borrower’s Margin Stock minus (y) all Ordinary Liabilities to the extent not in excess of the amount determined under clause (x) immediately above, plus (B) the excess, if any, of (x) the Maximum Borrowing Value of the Borrower’s Non-Margin Assets over (y) all Ordinary Liabilities to the extent in excess of the amount determined under clause (A)(x) immediately above.

 

7.8Investment

 

(a)           The Borrower will not purchase, acquire, or otherwise have exposure to, any Investment, other than Permitted Investments.

 

(b)           The Borrower will not enter into or otherwise acquire or hold any Financial Contract (i) unless (1) the collateral, if any, received or receivable by the Borrower in connection therewith is solely in the form of cash or short-term U.S. treasury securities, and (2) each counterparty thereto or issuer thereof has a minimum senior unsecured unenhanced long term debt rating of at least A- by S&P (or the equivalent rating of another independent rating agency (other than Moody’s) if not so rated by S&P) and at least A3 by Moody’s (or the equivalent rating of another independent rating agency (other than S&P) if not so rated by Moody’s), or (ii) in any case for the purpose of creating or continuing leverage.

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7.9Sanctions, Etc.

 

(a)           The Borrower will not, directly or indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (i) to fund, finance or facilitate any activities or business of or with any Person, or in any country, region or territory, that, at the time, is, or whose government is, the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as underwriter, lender, advisor, investor, or otherwise).

 

(b)           The Borrower will not, and will not cause or permit any subsidiary thereof to, violate any applicable law, rule or regulation regarding Sanctions or money laundering, or any Anti-Terrorism Law or Anti-Corruption Law.

 

(c)           The Borrower and each subsidiary thereof shall at all times maintain, and be in compliance with, policies and procedures designed to promote and achieve compliance by each Affected Person with all applicable laws, rules and regulations regarding Sanctions and money laundering, Anti-Terrorism Laws and Anti-Corruption Laws.

 

ARTICLE VIII 

EVENTS OF DEFAULT

 

8.1Events of Default

 

Each of the following shall constitute an “Event of Default”:

 

(a)           any principal of any Loan shall not be paid when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

 

(b)           any interest on any Loan or any fee, commission or any other amount (other than an amount referred to in paragraph (a) of this Section 8.1) payable under any Loan Document shall not be paid when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

 

(c)           any representation, warranty or certification made or deemed made by or on behalf of the Borrower in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

 

(d)           (i) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 7.7(a) and such failure shall continue unremedied for a period of twenty consecutive days, (ii) the Adjusted Asset Coverage shall be less than 2.50:1.00 at any time, or (iii) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Sections 6.1 (a), (b), (c), or (d) or 6.3, 6.8 or 6.9 or in Article 7 (other than Section 7.7(a));

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(e)           the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Credit Agreement (other than those specified in paragraphs (a), (b) or (d) of this Section 8.1), and such failure shall continue unremedied for a period of 30 days after the Borrower shall, or reasonably should, have obtained knowledge thereof;

 

(f)            the Borrower shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness when and as the same shall become due and payable (after giving effect to any applicable grace period or notice requirement);

 

(g)           any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any such Material Indebtedness or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that this paragraph (g) shall not apply to secured Indebtedness that becomes due solely as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

 

(h)           an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower, or the debts of the Borrower, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of the assets of the Borrower; and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(i)            the Borrower shall (i) voluntarily commence (directly or on its behalf) any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to (directly or on its behalf) the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in paragraph (h) of this Section 8.1, (iii) apply for or consent to (in either case, directly or on its behalf) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

 

(j)            the Borrower shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

 

(k)           (i) the Investment Adviser shall fail to be Tortoise Capital Advisors, LLC, or an Affiliate thereof, (ii) the custodian for all of the assets of the Borrower shall fail to be U.S. Bank National Association, or an Affiliate thereof, (iii) the sole administrator for the Borrower shall fail to be U.S. Bancorp Fund Services, LLC, or an Affiliate thereof, or (iv) the independent auditors for the Borrower shall fail to be Ernst & Young LLP;

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(l)            Tortoise Capital Advisors, LLC, shall fail to be an Affiliate of Mariner Holdings, LLC;

 

(m)          one or more judgments for the payment of money (not paid or covered by insurance) in an aggregate amount in excess of the Threshold Amount shall be rendered against the Borrower and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, vacated or bonded or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower to enforce any such judgment;

 

(n)           any Loan Document shall cease, for any reason other than pursuant to its terms, to be in full force and effect, or with respect to the Borrower, the Borrower shall so assert in writing or shall disavow any of its obligations thereunder;

 

(o)           the suspension of registration of the Borrower’s shares or the commencement of any proceeding for such purpose;

 

(p)           the Borrower shall fail to observe or perform any covenant, condition or agreement contained in any Security Document;

 

(q)           except as a result of any sale or other transfer of any asset in accordance with the terms of the Loan Documents, any Lien purported to be created under the Security Agreement shall cease to be, or shall be asserted by the Borrower not to be, a valid and perfected Lien on any Collateral (as defined in the Security Agreement), with the priority required by the applicable Security Document; or

 

(r)            the Borrower’s shares shall be suspended from trading on The New York Stock Exchange for more than two consecutive days upon which trading in shares generally occurs on such exchange, or shall be delisted.

 

8.2Remedies

 

If any Event of Default shall occur and be continuing then, and in every such event (other than an event described in paragraph (h) or (i) of Section 8.1), and at any time thereafter during the continuance of such event, the Bank may, by notice to the Borrower, take either or both of the following actions, at the same or different times: (a) declare the Commitment terminated, and thereupon the Commitment shall terminate immediately and/or (b) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of such Loans so declared to be due and payable, together with accrued and unpaid interest thereon and all fees and other obligations of the Borrower accrued and unpaid under the Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in the case of any event described in paragraph (h) or (i) of Section 8.1, the Commitment shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued and unpaid under the Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

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ARTICLE IX 

MISCELLANEOUS

 

9.1Notices

 

Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, or sent by electronic transmission in “portable document format”, as follows:

 

(a)           if to the Borrower, to it at 11550 Ash Street, Suite 300 Leawood, KS 66211, Attention: Brad Adams, (Telephone: (913) 981-1020; Facsimile: (913) 981-1021; or

 

(b)           if to the Bank, to it at, (i) in all cases, 40 King Street West, 55th Floor, Toronto, ON Canada M5H 1H1, Attention: Eli Mou (Telephone: (416) 350-1178; Facsimile: (416) 350-1161; e-mail address: eli.mou@scotiabank.com and (ii) in the case of all notices and other communications pursuant to Article 2, with a copy to 720 King Street West, 2nd Floor, Toronto, ON Canada M5 2T3, Attention: GWS LoanOps US Corp (Telephone: (212) 225-5705; Facsimile: (212) 225-5709; e-mail address: GWSLoanOps.USCorp@scotiabank.com).

 

Any party hereto may change its address, e-mail address or facsimile number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Credit Agreement shall be deemed to have been given on the date of receipt.

 

9.2Waivers; Amendments

 

(a)           No failure or delay by the Bank in exercising any right or power under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Bank under the Loan Documents are cumulative and are not exclusive of any rights or remedies that the Bank would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the Bank shall have consented thereto in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Bank may have had notice or knowledge of such Default at the time.

 

(b)           Neither this Credit Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Bank.

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9.3Expenses; Indemnity; Damage Waiver

 

(a)           The Borrower shall pay (i) all reasonable out-of-pocket costs and expenses incurred by the Bank and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Bank, in connection with the preparation, negotiation, closing and administration of this Credit Agreement or any amendments, modifications or waivers of the provisions of any Loan Document (whether or not the transactions contemplated thereby shall be consummated) and (ii) all reasonable out-of-pocket costs and expenses incurred by the Bank, including the reasonable fees and disbursements of counsel for the Bank, in connection with the enforcement or protection of its rights under the Loan Documents, including its rights under this Section, or in connection with the Loans, including all such out-of-pocket costs and expenses incurred during any workout, restructuring or negotiations.

 

(b)           The Borrower shall indemnify the Bank and each Related Party thereof (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from all losses, claims, damages, liabilities and related costs and expenses (collectively, “Losses”), including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of or as a result of (i) the execution or delivery by the Borrower of any Loan Document or any agreement or instrument contemplated thereby, the performance by the Borrower of its obligations under the Loan Documents or the consummation of the Transactions or any other transactions contemplated thereby, (ii) any Loan or the use of the proceeds thereof, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto. Subject to Section 9.3(c), nothing herein contained shall prevent or prohibit the Borrower from bringing any action against the Bank to recover any Losses suffered by the Borrower to the extent caused by the Bank’s failure to exercise due care in the performance of its obligations under the Loan Documents. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Bank (as found by a final and nonappealable decision of a court of competent jurisdiction), the Bank shall be deemed to have exercised due care.

 

(c)           To the extent permitted by applicable law, the Borrower agrees that it shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Loan Document or any agreement, instrument or other document contemplated thereby, the Transactions or any Loan or the use of the proceeds thereof.

 

(d)           All amounts due under this Section shall be payable promptly but in no event later than 10 days after written demand therefor.

 

9.4Successors and Assigns

 

The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (a) the Borrower shall not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Bank (and any attempted assignment or transfer by the Borrower without such consent shall be null and void), and (b) the Bank shall not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Borrower, such consent not to be (i) required during the continuance of any Event of Default, or (ii) unreasonably withheld, conditioned or delayed. Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of the Bank) any legal or equitable right, remedy or claim under or by reason of any Loan Document. Notwithstanding anything to the contrary herein contained, the Bank may at any time pledge or assign a security interest in all or any portion of its rights under the Loan Documents to secure obligations of the Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release the Bank from any of its obligations hereunder or substitute any such pledgee or assignee for the Bank as a party hereto.

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9.5Survival

 

All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Credit Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Credit Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Bank may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under the Loan Documents is outstanding and unpaid and so long as the Commitment has not expired or terminated. The provisions of Sections 3.3, 3.7 and 9.3 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans and the termination of the Commitment or the termination of this Credit Agreement or any provision hereof.

 

9.6Counterparts; Integration; Effectiveness

 

This Credit Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute but one contract. This Credit Agreement and any separate letter agreements with respect to fees payable to the Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.1, this Credit Agreement shall become effective when it shall have been executed by the Bank and when the Bank shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of this Credit Agreement by facsimile transmission or electronic transmission in “portable document format” shall be effective as delivery of a manually executed counterpart of this Credit Agreement.

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9.7Severability

 

In the event any one or more of the provisions contained in this Credit Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the legal and economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

9.8Right of Setoff

 

If an Event of Default shall have occurred and be continuing, the Bank and its Affiliates are hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by it to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter owing under the Loan Documents, irrespective of whether or not it shall have made any demand under any Loan Document and although such obligations may be unmatured. The rights of the Bank under this Section are in addition to other rights and remedies (including other rights of set-off) that it may have.

 

9.9Governing Law; Jurisdiction; Consent to Service of Process

 

(a)           THIS CREDIT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

(b)           The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to the Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that, to the extent permitted by applicable law, all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Credit Agreement shall affect any right that the Bank may otherwise have to bring any action or proceeding relating to this Credit Agreement or the other Loan Documents against the Borrower, or any of its property, in the courts of any jurisdiction.

 

(c)            The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the Loan Documents in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

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(d)           Each party to this Credit Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.1. Nothing in this Credit Agreement will affect the right of any party to this Credit Agreement to serve process in any other manner permitted by law.

 

9.10WAIVER OF JURY TRIAL

 

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CREDIT AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

9.11Headings

 

Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Credit Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Credit Agreement.

 

9.12Interest Rate Limitation

 

Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under applicable law (collectively the “charges”), shall exceed the maximum lawful rate (the “maximum rate”) that may be contracted for, charged, taken, received or reserved by the Bank in accordance with applicable law, the rate of interest payable in respect of such Loan, together with all of the charges payable in respect thereof, shall be limited to the maximum rate and, to the extent lawful, the interest and the charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated, and the interest and the charges payable to the Bank in respect of other Loans or periods shall be increased (but not above the maximum rate therefor) until such cumulated amount, together with interest thereon at the Alternate Base Rate to the date of repayment, shall have been received by the Bank.

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9.13Treatment of Certain Information

 

The Bank agrees to use reasonable precautions to keep confidential, in accordance with the Bank’s customary procedures for handling confidential information of the same nature, all non-public information supplied by the Borrower pursuant to this Credit Agreement which (a)(i) is clearly identified by such Person as being confidential at the time the same is delivered to the Bank, or (ii) constitutes any financial statement, list of investments or other assets, financial projections or forecasts, budget, compliance certificate, audit report, draft press release, management letter or accountants’ certification delivered hereunder, and (b) as of any date of determination, was received by the Bank within the immediately preceding three year period (“Information”), provided, however, that nothing herein shall limit the disclosure of any such Information (i) to such of its respective Related Parties as need to know such Information, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, or requested by any bank regulatory authority, (iii) on a confidential basis, to prospective lenders or their counsel, (iv) to auditors or accountants, and any analogous counterpart thereof, (v) in connection with any litigation to which the Bank is a party, (vi) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Credit Agreement, (B) becomes available to the Bank on a non-confidential basis from a source other than the Borrower, or (C) was available to the Bank on a non-confidential basis prior to its disclosure to the Bank by the Borrower; and (vii) to the extent the Borrower shall have consented to such disclosure in writing. The Bank acknowledges that Information furnished to it pursuant to this Credit Agreement may include material non-public information concerning the Borrower, its Related Parties or the Borrower’s securities, and confirms that it has developed compliance procedures regarding the use of material non-public information and that it will handle such material non-public information in accordance with those procedures and applicable law. Notwithstanding anything to the contrary contained in any Loan Document, no provision thereof shall (1) restrict the Bank from providing information to Federal Reserve supervisory staff, (2) require or permit, without the prior approval of the Federal Reserve, the Bank to disclose to the Borrower or any affiliate that any information will be or was provided to Federal Reserve supervisory staff, or (3) require or permit, without the prior approval of the Federal Reserve, the Bank to inform the Borrower or any affiliate of a current or upcoming Federal Reserve examination or any nonpublic Federal Reserve supervisory initiative or action. Nothing in this Credit Agreement or the Loan Documents shall prevent any of the parties hereto and their respective directors, officers, employees, agents and advisors from disclosing to any and all Persons the Tax treatment and Tax structure of the transactions contemplated by this Credit Agreement.

 

9.14USA Patriot Act Notice

 

The Bank hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Bank to identify the Borrower in accordance with the Patriot Act.

 

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IN WITNESS WHEREOF, each party hereto has caused this Credit Agreement to be executed by its duly authorized representative as of the date first above written.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
     
  By: /s/ P. Bradley Adams
  Name: P. Bradley Adams
  Title: CEO

 

  THE BANK OF NOVA SCOTIA
     
  By: /s/ Eli Mou
  Name: Eli Mou
  Title: Director and Execution Head

 

Tortoise Power and Energy Infrastructure Fund, Inc. – Credit Agreement

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT A

 

FORM OF NOTE

 

[Date]

New York, New York

 

FOR VALUE RECEIVED, Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), hereby promises to pay to the order of The Bank of Nova Scotia (the “Bank”) the unpaid principal amount of the Loans made by the Bank to the Borrower, in the amounts and at the times set forth in the Credit Agreement, dated as of May 17, 2016, between the Borrower and the Bank (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), and to pay interest from the date hereof on the principal balance of such Loans from time to time outstanding at the rate or rates and at the times set forth in the Credit Agreement, in each case at the office of the Bank specified therefor in the Credit Agreement, or at such other place as the Bank may specify from time to time, in lawful money of the United States of America in immediately available funds. Each term that is defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

The Loans evidenced by this Note are prepayable in the amounts, and under the circumstances, and their respective maturities are subject to acceleration upon the terms, set forth in the Credit Agreement. This Note is subject to, and should be construed in accordance with, the provisions of the Credit Agreement, and is entitled to the benefits and any security set forth in the Loan Documents.

 

The Bank is hereby authorized to record on the Loan Schedule annexed hereto, and any continuation sheet(s) which the Bank may attach thereto, the date, amount, type, Interest Period, Applicable Rate, and amount of repayment for each Loan. The entries made in the Loan Schedule shall be prima facie evidence of the existence and amounts of the obligations hereunder, provided that the failure to so record or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of the Loan Documents.

 

Except as specifically otherwise provided in the Credit Agreement, the Borrower hereby waives presentment, demand, notice of dishonor, protest, notice of protest and all other demands, protests and notices in connection with the execution, delivery, performance, collection and enforcement of this Note.

 

Whenever in this Note any Person is referred to, such reference shall be deemed to include the successors and assigns of such Person. The Borrower shall not have the right to assign its rights or obligations hereunder or any interest herein (and any such attempted assignment shall be void). No failure or delay by the Bank in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. Neither this Note nor any provision hereof may be waived, amended or modified, nor shall any departure therefrom be consented to, except pursuant to a written agreement entered into between the Borrower and the Bank.

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

All communications and notices hereunder shall be in writing and given as provided in Section 9.1 of the Credit Agreement.

 

This Note, and the obligations of the Borrower hereunder, are secured by the Security Agreement.

 

The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Note or the other Loan Documents, or for recognition or enforcement of any judgment, and the Borrower hereby irrevocably and unconditionally agrees that, to the extent permitted by applicable law, all claims in respect of any such action or proceeding may be heard and determined in such New York State, Federal and appellate court. The Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Note shall affect any right that the Bank may otherwise have to bring any action or proceeding relating to this Note or the other Loan Documents against the Borrower, or any of its property, in the courts of any jurisdiction.

 

The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Note or the other Loan Documents in any court referred to in the preceding paragraph hereof. The Borrower hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

The Borrower irrevocably consents to service of process in the manner provided for notices herein. Nothing herein will affect the right of the Bank to serve process in any other manner permitted by law.

2

 

THE BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE. THE BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ACCEPT THIS NOTE AND ENTER INTO THE LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

 

This Note is subject to Section 1.4 of the Credit Agreement.

 

[the remainder of this page has been intentionally left blank]

3

 

IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by its duly authorized representative as of the date first above written.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
         
  By:             
  Name:
  Title:  

 

LOAN SCHEDULE

 

to

 

Note

 

  Amount   Interest Applicable Amount of Notation
Date of Loan Type Period Rate repayment made by
             
             
             
             
             

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT B

 

OUTLINE OF OPINION OF COUNSEL TO THE BORROWER

 

1.             The Borrower is a corporation organized, validly existing and in good standing under the laws of the State of Maryland, and has all requisite corporate power and authority to conduct its business as it is currently conducted.

 

2.             The Borrower is duly registered as a closed-end investment company under the Investment Company Act of 1940, as amended.

 

3.             The Borrower is a “regulated investment company” under Section 851 of the Internal Revenue Code of 1986, as amended.

 

4.             The execution and delivery by the Borrower of the Loan Documents to which it is a party and the consummation by the Borrower of its obligations thereunder are within the Borrower’s corporate power and authority and have been duly authorized by all necessary corporate action on the part of the Borrower.

 

5.             Each Loan Document to which the Borrower is a party has been duly executed and delivered by the Borrower, and constitutes the valid and binding obligation of the Borrower, enforceable against the Borrower and the Borrower’s property in accordance with its terms.

 

6.             The execution, delivery and performance by the Borrower of each Loan Document to which it is a party and the consummation by the Borrower of its obligations thereunder do not result in (a) any violation by the Borrower of (i) the provisions of its Organization Documents, (ii) applicable law, or (iii) to our knowledge, any order, writ, judgment or decree of any U.S. federal or state court or governmental authority or regulatory body having jurisdiction over the Borrower or any of its properties, or (b) a breach or default or require the creation or imposition of any security interest or Lien (other than the security interests created under the Loan Documents) upon any properties of the Borrower pursuant to any material agreement, contract or instrument known to us to which the Borrower is a party or by which it or any of its property is bound.

 

7.             No consent, approval, authorization or other action by, and no notice to or filing (other than the filing of UCC Financing Statements in connection with the perfection of the security interests created under the Loan Documents) with, any federal or state governmental authority or regulatory body (other than routine federal and state securities filings) is required for the due execution, delivery and consummation by the Borrower of its obligations under the Loan Documents to which it is a party.

 

8.             We hereby confirm to you that, to our knowledge, no action or proceeding against and naming the Borrower is pending or overtly threatened by written communication to the Borrower before any court, governmental authority or arbitrator that calls into question the validity or enforceability of any Loan Document or which would result in any material adverse effect on the business operations, prospects, or financial condition of the Borrower.

 

9.             The Security Agreement is effective to create in favor of the Bank, a legal, valid and enforceable security interest in the Collateral (as defined in the Security Agreement). When the pledged property constituting such Collateral is delivered to the Custodian or the Custodian otherwise holds the securities entitlements thereto, such security interest shall be perfected, free of adverse claims. When the UCC financing statement is filed in the governmental office listed thereon, such security interest shall be perfected.

2

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT C-1

 

FORM OF WRITTEN VARIABLE BORROWING REQUEST

 

[Date]

 

The Bank of Nova Scotia 

40 King Street West

55th Floor

Toronto, ON, Canada

M5H 1H1

Attn: Eli Mou

 

Gentlemen/Ladies:

 

Reference is made to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation, and The Bank of Nova Scotia (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”). Each term defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

[For a Borrowing Request submitted in connection with a borrowing of a Variable Rate Loan under Section 2.2(a)]1

 

1.Pursuant to Section 2.2(a) of the Credit Agreement, the undersigned hereby gives notice of its intention to borrow a Variable Rate Loan (the “Proposed Borrowing”) under the Credit Agreement, and in connection therewith sets forth below the information relating to such borrowing as required by Section 2.2(a) of the Credit Agreement:

 

(a)The aggregate amount of the Proposed Borrowing is $________.

 

(b)The date (which shall be a Business Day) of such Proposed Borrowing is _________________, 20___ (the “Proposed Borrowing Date”).

 

(c)The Proposed Borrowing is to be [an Overnight Loan] [an ABR Loan] [or] [a LIBOR Loan having an Interest Period of ___________].

 

(d)Proceeds of the Proposed Borrowing are to be wired or otherwise transferred to: [Specify exact wire or transfer instructions].

 

 
1If no new borrowing is requested by the submission of this Borrowing Request, delete the opening paragraph and the numbered paragraphs comprising this section. If a new borrowing is hereby requested, complete as appropriate.

 

 

2.The Adjusted Asset Coverage (after giving effect to the Proposed Borrowing) is set forth below, reasonably detailed calculations of which appear on Schedule A attached hereto:

 

Adjusted Asset Coverage

 

______:1.00

 

3.The Borrower hereby certifies that:

 

(a)on and as of the date hereof, no Default has occurred and is continuing, and

 

(b)on and as of the Proposed Borrowing Date, (i) no Default shall have occurred and be continuing, and (ii) the representations and warranties of the Borrower set forth in each Loan Document to which it is a party shall be true and correct in all respects (other than, as to any such representation or warranty that by its terms refers to a specific date, in which case such representation and warranty shall be true and correct in all respects as of such specified date).

 

[For a Borrowing Request submitted in connection with a conversion or continuation of a Variable Rate Loan under Section 2.2(b)]2

 

1.Pursuant to Section 2.2(b) of the Credit Agreement, the undersigned hereby gives notice of its intention to [convert all or any portion of an ABR Loan to a LIBOR Loan] [convert all or any portion of a ABR Loan to an Overnight Loan] [convert all or any portion of an Overnight Loan to an ABR Loan][convert all or any portion of a Overnight Loan to a LIBOR Loan][convert all or any portion of a LIBOR Loan to an ABR Loan] [convert all or any portion of a LIBOR Loan to an Overnight Loan][continue all or any portion of a LIBOR Loan as a LIBOR Loan having an additional Interest Period] (the “[Proposed Conversion][Proposed Continuation]”) under the Credit Agreement, and in connection therewith sets forth below the information relating to such borrowing as required by Section 2.2(b) of the Credit Agreement:

 

(a)The aggregate amount of the Variable Rate Loan to be [converted][continued] is $________. Such Variable Rate Loan is a[n] [ABR Loan][Overnight Loan][LIBOR Loan].

 

(b)The date (which shall be a Business Day) of such [conversion][continuation] is _________________, 20___.

 

(c)The Variable Rate Loan to be [converted][continued] shall be [converted into a [ABR Loan] [Overnight Loan][LIBOR Loan having an Interest Period of ___________]] [continued as a LIBOR Loan having an Interest Period of ____________].

 

[the remainder of this page has been intentionally left blank]

 

 

2 If no conversion or continuation of an existing Loan is requested by the submission of this Borrowing Request, delete the opening paragraph and the numbered paragraphs comprising this section. If a conversion or continuation is hereby requested, complete as appropriate.

2

 

IN WITNESS WHEREOF, the undersigned has caused this Written Variable Borrowing Request to be executed by its duly authorized representative as of the date first above written.

 

  Very truly yours,
   
  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
   

  By:              
  Name:                            
  Title:                            

 

 

SCHEDULE A

 

Detailed Calculations 

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT C-2

 

FORM OF WRITTEN FIXED BORROWING REQUEST

 

[Date]

 

The Bank of Nova Scotia

40 King Street West

55th Floor

Toronto, ON, Canada

M5H 1H1

Attn: Eli Mou

 

Gentlemen/Ladies:

 

Reference is made to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation, and The Bank of Nova Scotia (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”). Each term defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

1.Pursuant to Section 2.3(a) of the Credit Agreement, the undersigned hereby gives notice of its intention to borrow a Fixed Rate Loan (the “Proposed Borrowing”) under the Credit Agreement, and in connection therewith sets forth below the information relating to such borrowing as required by Section 2.3(a) of the Credit Agreement:

 

(a)The aggregate amount of the Proposed Borrowing is $________.

 

(b)The date (which shall be a Business Day) of such Proposed Borrowing is _________________, 20___ (the “Proposed Borrowing Date”).

 

(c)The Proposed Borrowing is [a new borrowing][a conversion of all or any part of any outstanding Variable Rate Loan].

 

(d)The interest period to be used by the Bank to determine the applicable Fixed Rate is _______ year[s].

 

(e)Proceeds of the Proposed Borrowing are to be wired or otherwise transferred to: [Specify exact wire or transfer instructions].

 

 

2.The Adjusted Asset Coverage (after giving effect to the Proposed Borrowing) is set forth below, reasonably detailed calculations of which appear on Schedule A attached hereto:

 

Adjusted Asset Coverage

 

______:1.00

 

3.The Borrower hereby certifies that:

 

(a)on and as of the date hereof, no Default has occurred and is continuing, and

 

(b)on and as of the Proposed Borrowing Date, (i) no Default shall have occurred and be continuing, and (ii) the representations and warranties of the Borrower set forth in each Loan Document to which it is a party shall be true and correct in all respects (other than, as to any such representation or warranty that by its terms refers to a specific date, in which case such representation and warranty shall be true and correct in all respects as of such specified date).

 

[the remainder of this page has been intentionally left blank

2

 

IN WITNESS WHEREOF, the undersigned has caused this Written Fixed Borrowing Request to be executed by its duly authorized representative as of the date first above written.

 

  Very truly yours,
   
  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
   

  By:              
  Name:                            
  Title:                            

 

 

SCHEDULE A

 

Detailed Calculations 

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT D

 

FORM OF CLOSING CERTIFICATE

 

Reference is made to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), and The Bank of Nova Scotia (the “Credit Agreement”). Each term defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein. This Certificate is being delivered pursuant to Section 5.1(d) of the Credit Agreement.

 

The undersigned hereby certifies that:

 

1.          I am [the or a] duly elected or appointed, as the case may be, and qualified [Assistant] Secretary of the Borrower.

 

2.          Attached hereto as Annex A are true, complete and correct copies of each Organization Document of the Borrower, as in effect on the date hereof, as follows: [List Organization Documents].

 

3.          Attached hereto as Annex B are true, complete and correct copies of the resolutions of the Board approving each Loan Document to which the Borrower is a party and the transactions contemplated thereby, all of which are in full force and effect on the date hereof.

 

4.          Attached hereto as Annex C is a certificate of good standing of the Borrower issued by the Secretary of State or analogous official of its jurisdiction of formation.

 

5.          Attached hereto as Annex D are true, complete and correct copies of the most recent Prospectus, Statement of Additional Information and current Registration Statement of the Borrower, as in effect on the date hereof.

 

6.          Attached hereto as Annex E is a true, complete and correct copy of the Custody Agreement.

 

7.          The following persons are duly elected or appointed, as the case may be, and qualified authorized representatives of the Borrower, in each case having the title set forth below, hand the signatures appearing opposite their respective names are the genuine signatures of such persons:

 

Name   Title   Signature
       
     

 

 

IN WITNESS WHEREOF, I have hereunto set my hand as of [Date].

 

     
  Name:              

 

  Title: [Assistant] Secretary

 

The undersigned hereby certifies that:

 

1.       _____________________ is the [the or a] duly elected or appointed, as the case may be, and qualified [Assistant] Secretary of the Borrower.

 

2.       Attached hereto as Annex F are true, complete and correct copies of the most recent annual and semiannual reports of the Borrower.

 

IN WITNESS WHEREOF, I have hereunto set my hand as of [Date].

 

     
  Name:              

 

  Title:         

 

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC
EXHIBIT E - FORM OF FR U-1
FR U-1
OMB Number 7100-0115
Approval expires January 31, 2018
Page 1 of 2

 

Board of Governors of the Federal Reserve System

 

Statement of Purpose for an Extension of Credit

Secured by Margin Stock—FR U-1

 

THE BANK OF NOVA SCOTIA 

 

Name of Bank

 

This form is required by law (15 U.S.C. §§ 78g and 78w; 12 C.F.R. § 221). The Federal Reserve may not conduct or sponsor, and an organization (or a person) is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
   

 

Instructions

 

1.This form must be completed when a bank extends credit in excess of $100,000 secured directly or indirectly, in whole or in part, by any margin stock.

 

2.The term “margin stock” is defined in Regulation U (12 C.F.R. § 221) and includes, principally: (1) stocks that are registered on a national securities exchange or any over-the-counter security designated for trading in the National Market System; (2) debt securities (bonds) that are convertible into margin stock; and (3) shares of most mutual funds.

 

3.Please print or type (if space is inadequate, attach separate sheet).

 

 

 

Part I

 

To be completed by borrower(s)

 

1. What is the amount of the credit being extended?                 $60,000,000.00                         
   
2. Will any part of this credit be used to purchase or carry margin stock?             x  Yes     ¨  No
  If the answer is “No,” describe the specific purpose of the credit.

 

I (We) have read this form and certify that to the best of my (our) knowledge and belief the information given is true, accurate, and complete, and that the margin stock and any other securities collateralizing this credit are authentic, genuine, unaltered, and not stolen, forged, or counterfeit.

 

Signed:  TORTOISE POWER AND ENERGY
               INFRASTRUCTURE FUND, INC.
    Signed:    
                   
             
Borrower’s Signature Date   Borrower’s Signature   Date
             
Print or Type Name     Print or Type Name    

 

This form should not be signed if blank.

 

A borrower who falsely certifies the purpose of a credit on this form or otherwise willfully or intentionally evades the provisions of Regulation U will also violate Federal Reserve Regulation X, “Borrowers of Securities Credit.”

 

 

Public reporting burden for this collection of information is estimated to average 10 minutes per response, including the time to gather and maintain data in the required form and to review instructions and complete the information collection. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Secretary, Board of Governors of the Federal Reserve System, 20th and C Streets, NW, Washington, DC 20551; and to the Office of Management and Budget, Paperwork Reduction Project (7100-0115), Washington, DC 20503.

 

01/2015

 

 

  FR U-1
  Page 2 of 2

 

Part II

 

To be completed by bank only if the purpose of the credit is to purchase or carry margin securities (Part I (2) answered “yes”).

 

1.List the margin stock securing this credit; do not include debt securities convertible into margin stock. The maximum loan value of margin stock is 50 percent of its current market value under the current Supplement to Regulation U.

 

      Date and source  
No. of shares   Market price of valuation Total market
Issue per share (See note below) value per issue
        
  SEE ATTACHMENT A       
         

 

2.List the debt securities convertible into margin stock securing this credit. The maximum loan value of such debt securities is 50 percent of the current market value under the current Supplement to Regulation U.

 

      Date and source  
Principal
amount
  of valuation Total market
Issue Market price (See note below) value per issue
  SEE ATTACHMENT A      
         

 

3.List other collateral including nonmargin stock securing this credit.

 

      Date and source  
    Market price of valuation Good faith
  Describe briefly (See note below) loan value
        
SEE ATTACHMENT A      
         

 

NOTE: Bank need not complete fields for Date and source of valuation if the market value was obtained from regularly published information in either a journal of general circulation or an automated quotation system.

 

 

 

Part III

 

To be signed by a bank officer in all instances.

 

I am a duly authorized representative of the bank and understand that this credit secured by margin stock may be subject to the credit restrictions of Regulation U. I have read this form and any attachments, and I have accepted the customer’s statement in Part I in good faith as required by Regulation U*; and I certify that to the best of my knowledge and belief, all the information given is true, accurate, and complete. I also certify that if any securities that directly secure the credit are not or will not be registered in the name of the borrower or its nominee, I have or will cause to have examined the written consent of the registered owner to pledge such securities. I further certify that any securities that have been or will be physically delivered to the bank in connection with this credit have been or will be examined, that all validation procedures required by bank policy and the Securities Exchange Act of 1934 (section 17(f), as amended) have been or will be performed, and that I am satisfied to the best of my knowledge and belief that such securities are genuine and not stolen or forged and their faces have not been altered.

 

Signed:   THE BANK OF NOVA SCOTIA

 

Bank Officer’s Signature   Date  
     
ELI MOU   DIRECTOR & EXECUTION HEAD
Print or Type Name   Title

 

 

* To accept the customer’s statement in good faith, the duly authorized representative of the creditor must be alert to the circumstances surrounding the credit and, if in possession of any information that would cause a prudent person not to accept the statement without inquiry, must have investigated and be satisfied that the statement is truthful. Among the facts which would require such investigation are receipt of the statement through the mail or from a third party.

 

This form must be retained by the lender for three years after the credit is extinguished.

 

09/2011

 

 

Attachment A

To

Federal Reserve Form U-1

 

This Attachment A forms a part of the Form FR U-1 (the “Form FR U-1”) that is being executed in connection with that certain Credit Agreement, dated as of May 17, 2016 (the “Credit Agreement”), between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Company”) and The Bank of Nova Scotia (the “Bank”).

 

For purposes of the Form FR U-1, the Company is the “Borrower”.

 

The amount of credit being extended is up to $60,000,000.

 

The Company is an investment company registered under the Investment Company Act of 1940, as amended.

 

All or a substantial portion of the Company’s assets may be “margin stock” (within the meaning of Regulation U). The obligations of the Company under the Credit Agreement and the other agreements and instruments executed and delivered in connection therewith are directly secured by assets that may at times include margin stock.

 

A list of assets of the Company shall be provided at such times, and in such detail, as is required by Regulation U.

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT F

 

FORM OF COMPLIANCE CERTIFICATE

 

Reference is made to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation and The Bank of Nova Scotia (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein that are defined in the Credit Agreement shall have the meanings therein defined. This Certificate is being delivered pursuant to Section 6.1[(c) or (d)] of the Credit Agreement.

 

[SELECT ONE OF THE FOLLOWING TWO OPTIONS]

 

[[OPTION 1 - For quarterly compliance certificate under Section 6.1(c) of the Credit Agreement] The undersigned, an authorized representative of the Borrower, hereby certifies that as of [fill in the appropriate fiscal quarter-end date], [[no Default has occurred and is continuing] or [the following Default[s] [has/have] occurred and [is/are] continuing: _____________________].]

 

[OR]

 

[[OPTION 2 - For monthly compliance certificate under Section 6.1(d) of the Credit Agreement] The undersigned, an authorized representative of the Borrower, hereby certifies that as of [fill in the appropriate month-end date]:

 

1.           The Adjusted Asset Coverage is set forth below, reasonably detailed calculations of which appear on Schedule A attached hereto:

 

Adjusted Asset Coverage

 

______:1.00

 

2.             Senior Debt does not exceed the maximum amount of Senior Debt that would be permitted to be incurred by or for the account of the Borrower under its Fundamental Policies.

 

3.             Senior Debt does not exceed the maximum amount of Senior Debt that would be permitted to be incurred by or for the account of the Borrower on the date hereof under the ICA or other applicable law.

 

4.             Indebtedness of the Borrower does not exceed the sum of (A) 50% of (x) the Maximum Borrowing Value of the Borrower’s Margin Stock minus (y) all Ordinary Liabilities to the extent not in excess of the amount determined under clause (x) immediately above, plus (B) the excess, if any, of (x) the Maximum Borrowing Value of the Borrower’s Non-Margin Assets over (y) all Ordinary Liabilities to the extent in excess of the amount determined under clause (A)(x) immediately above.

 

 

5.             The Borrower does not have exposure to any Investment other than Permitted Investments.

 

6.             The Borrower does not hold any Financial Contract (i) unless (1) the collateral, if any, received or receivable by the Borrower in connection therewith is solely in the form of cash or short-term U.S. treasury securities, and (2) each counterparty thereto or issuer thereof has a minimum senior unsecured unenhanced long term debt rating of at least A- by S&P (or the equivalent rating of another independent rating agency (other than Moody’s) if not so rated by S&P) and at least A3 by Moody’s (or the equivalent rating of another independent rating agency (other than S&P) if not so rated by Moody’s), or (ii) in any case for the purpose of creating or continuing leverage.

 

[the remainder of this page has been intentionally left blank]

 

 

IN WITNESS WHEREOF, I have hereunto set my hand as of [Date].

                 
  Name:                            
  Title:                            

 

 

[FOR OPTION 2 ONLY]

 

SCHEDULE A

 

Detailed Calculations 

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT G

 

FORM OF SECURITY AGREEMENT

 

Security Agreement (as the same may be amended, supplemented or otherwise modified from time to time, this “Security Agreement”), dated as of May 17, 2016, by and between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), and The Bank of Nova Scotia (the “Bank”).

 

RECITALS

 

I.             Reference is made to the Credit Agreement, dated as of the date hereof, between the Borrower and the Bank (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”).

 

II.            It is a condition precedent to the making of all Loans and all other extensions of credit under the Credit Agreement that the Borrower shall have executed and delivered this Security Agreement.

 

Therefore, in consideration of the Recitals, the terms and conditions herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Bank hereby agree as follows:

 

Section 1.               Defined Terms

 

(a)            Each term that is defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

(b)           When used in this Security Agreement, the following capitalized terms shall have the respective meanings ascribed thereto as follows:

 

Collateral” has the meaning set forth in Section 2.

 

Collateral Control Notice” means any of the following: (a) a Notice of Exclusive Control (as defined in the Control Agreement), or (b) other than in connection with obtaining information with respect to the Collateral, confirming the Custodian’s compliance with the Control Agreement, or confirming the Borrower’s compliance with the Loan Documents, (i) an Entitlement Order with respect to any Collateral, (ii) any instruction to a bank directing disposition of funds in any Deposit Account at such bank constituting Collateral, or (iii) any direction to a Commodity Intermediary to apply any value distributed on account of any Commodity Contract constituting Collateral.

 

Custody Account” means, collectively, each Commodity Account, Deposit Account and Securities Account that the Borrower maintains at any time and from time to time with the Custodian.

 

 

Custody Assets” means, as of any time, all of the Accounts, cash, cash equivalents, Chattel Paper, Deposit Accounts, Documents, Financial Assets, Financial Contracts, General Intangibles, Instruments, Investment Property, Money, Supporting Obligations in respect of the foregoing and Proceeds of all of the foregoing, in each case that, at such time, are in the Custody Account.

 

Excluded Collateral” means (a) any contract or agreement constituting a General Intangible or a Promissory Note, but only to the extent that the granting of a Security Interest therein by the Borrower would violate any applicable law or any enforceable provision of such contract or agreement, provided that to the extent the Security Interest herein granted at any time hereafter shall no longer violate any applicable law, and/or immediately upon such provision no longer being enforceable, as the case may be, such contract or agreement, as the case may be shall automatically and without any further action cease to be “Excluded Collateral”, and the Borrower shall be deemed to have granted automatically and without any further action a Security Interest therein subject hereto as if such law had never existed or such provision had never been enforceable, as the case may be, and (b) assets of the Borrower subject to any Lien permitted pursuant to Section 7.2(f) of the Credit Agreement, to the extent that the terms of the agreements governing such Lien contain a prohibition on the granting of a security interest therein pursuant hereto that is enforceable against the Borrower.

 

NYUCC” means the UCC as in effect in the State of New York on the date of this Security Agreement.

 

Obligations” means all of the obligations and liabilities of the Borrower to the Bank and the Related Parties thereof under the Loan Documents and each Secured Financial Contract, in each case whether fixed, contingent, now existing or hereafter arising, created, assumed, incurred or acquired.

 

Permitted Charge” means a Permitted Lien to the extent that its priority over the Security Interest created hereby would not (a) cause a breach of any representation or warranty of the Borrower in Section 3(c), or (b) violate any covenant of the Borrower in Section 4(h).

 

Secured Financial Contract” means a Financial Contract entered into by the Borrower with the Bank or any Related Party thereof.

 

UCC” means, with respect to any jurisdiction, Articles 1, 8 and 9 of the Uniform Commercial Code as from time to time in effect in such jurisdiction.

 

(c)           Except as may otherwise be expressly provided herein, when used in this Security Agreement, the following capitalized terms shall have the respective meanings ascribed thereto in the NYUCC: “Account”, “Adverse Claim”, “Chattel Paper”, “Commodity Account”, “Commodity Contract”, “Commodity Intermediary”, “Deposit Account”, “Document”, “Entitlement Order”, “Financial Asset”, “General Intangible”, “Instrument”, “Investment Property”, “Money”, “Proceeds”, “Promissory Note”, “Records”, “Secured Party”, “Securities Account”, “Security Interest”, and “Supporting Obligation” as the same may be modified by the provisions hereof. 

 

 

Section 2.       Grant of Security Interest

 

To secure the prompt and complete payment, observance and performance of the Obligations, the Borrower hereby grants to the Bank a Security Interest in and to all of the Borrower’s right, title and interest in and to the following (with respect to the items listed in clauses (ii) and (iii) below, only to the extent such items would not constitute Excluded Collateral):

 

(i)            the Custody Account and the Custody Assets,

 

(ii)          all Accounts, cash, cash equivalents, Chattel Paper, Deposit Accounts, Financial Assets, Financial Contracts, General Intangibles, Instruments, Investment Property, and Money,

 

(iii)          all Supporting Obligations in respect of all of the foregoing, and

 

(iv)          all Records in respect of all of the foregoing,

 

in each case, whether now owned or existing or hereafter arising or acquired, together with all of the Proceeds (which shall include all dividends, distributions, accessions and income on and in respect of all of the foregoing and all other rights and benefits in respect thereof) of all of the foregoing (collectively, the “Collateral”).

 

Section 3.       Representations and Warranties

 

The Borrower hereby represents and warrants to the Bank as follows:

 

(a)            As of the date hereof, the Borrower is a corporation duly formed and validly existing under the laws of the State of Maryland.

 

(b)           Except as otherwise expressly permitted under this Security Agreement, since the Borrower’s formation, there has been no change in (i) its legal name or structure, or (ii) its jurisdiction of formation.

 

(c)           On the date hereof, (i) this Security Agreement creates an enforceable Security Interest in the Collateral in favor of the Bank, (ii) there are no Liens upon the Collateral other than Permitted Liens, and (iii)(1) with respect to the Collateral constituting the Custody Account and the Custody Assets, the Bank has a perfected Security Interest in such Collateral, which Security Interest is, other than with respect to the Liens permitted by Section 7.2(e) of the Credit Agreement, prior to all other Liens, and (2) with respect to all other Collateral in which a Security Interest may be perfected by filing a financing statement, assuming the presentation for filing of the financing statement, a copy of which is attached as Annex A hereto, at the governmental office listed thereon together with the appropriate filing fees therefor on the date hereof, the Bank has a perfected Security Interest in such Collateral, which Security Interest is prior to all Liens other than the Liens permitted by Section 7.2(f) of the Credit Agreement. 

 

 

Section 4.       Covenants

 

The Borrower hereby covenants with the Bank as follows:

 

(a)            The Borrower shall not effect or permit any change in its legal name, its form of organization, its jurisdiction of organization, in each case unless it shall provide the Bank with prior written notice thereof and UCC financing statements (or amendments thereto), in form and substance reasonably satisfactory to the Bank, shall have been filed at the expense of the Borrower in all filing offices designated by the Bank.

 

(b)          The Borrower shall, at its own expense, promptly authorize, execute and deliver, as applicable, all certificates, instruments, endorsements, financing and continuation statements and amendments thereto, notices, agreements (including control agreements), and other documents, and take all further action, that the Bank may reasonably request from time to time in order to perfect and protect the Security Interest granted hereby or to enable the Bank to exercise and enforce its rights and remedies hereunder with respect to the Collateral. In furtherance of the foregoing, the Borrower agrees that all Chattel Paper, Instruments, and certificated Financial Assets constituting Collateral that are delivered to the Bank or the Custodian by, on behalf of, or for the benefit of, the Borrower shall be in bearer form or in registered form issued or indorsed (with appropriate signature guarantees, to the extent that it is usual and customary for the Custodian to obtain such signature guarantees in the ordinary course of its custody business) to the Bank or the Custodian, or a nominee of either of them, or in blank. The Borrower also agrees to provide to the Bank, from time to time upon reasonable request, evidence (including legal opinions from law firms satisfactory to the Bank and Collateral audits) reasonably satisfactory to the Bank as to the perfection and priority of the Liens created or intended to be created by the Security Agreement. If any assets are acquired by the Borrower after the date hereof (other than assets constituting Collateral that become subject to the Lien of the Security Agreement upon acquisition thereof and other than assets upon which the Bank has a first perfected Lien), the Borrower will notify the Bank thereof, and, if requested by the Bank, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take such actions as shall be necessary or reasonably requested by the Bank to grant and perfect such Liens, all at the expense of the Borrower.

 

(c)            To the fullest extent not prohibited by applicable law or any agreement to which it is a party or by which it is bound, the Borrower at its own expense shall furnish to the Bank such information, reports, statements and schedules with respect to the Collateral as the Bank may reasonably request from time to time.

 

(d)            The Borrower at its own expense shall defend the Collateral against all claims of any kind or nature (other than Permitted Charges) of all Persons at any time claiming the same or any interest therein adverse to the interests of the Bank or the Custodian.

 

(e)           Except as otherwise required by applicable law, the Borrower agrees that, with respect to the Collateral, neither the Bank nor the Custodian has any obligation to preserve rights against prior or third parties. 

 

 

(f)           The only duty of the Bank with respect to the Collateral delivered to it shall be to use reasonable care in the custody and preservation of the Collateral, and the Borrower agrees that if the Bank accords the Collateral substantially the same kind of care as it accords its own property or delivers such Collateral over to the Custodian, such care shall presumptively be deemed reasonable. In the event that all or any part of the Chattel Paper, Documents, Instruments, or certificated Financial Assets constituting the Collateral are lost, destroyed or wrongfully taken while in the possession of the Bank or the Custodian, the Borrower agrees that it will use commercially reasonable efforts to cause the delivery of new Chattel Paper, Documents, Instruments, or certificated Financial Assets, as the case may be, in place of those lost, destroyed or wrongfully taken upon request therefor by the Bank or the Custodian, without the necessity of any indemnity bond or other security, other than the Bank’s or the Custodian’s agreement of indemnity upon usual and customary terms therefor.

 

(g)           Anything herein to the contrary notwithstanding, (i) the Borrower shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Security Agreement had not been executed, (ii) the exercise by the Bank or the Custodian of any of its rights hereunder or under the Custody Agreement shall not release the Borrower from any of its duties or obligations under any such contract or agreement, (iii) the Bank shall not have any obligation or liability, including indemnification obligations, under any such contract or agreement by reason of this Security Agreement or the Custody Agreement, nor shall the Bank be obligated to perform any of the obligations or duties of the Borrower thereunder, to make any payment, to make any inquiry as to the nature or sufficiency of any payment received by the Borrower or the sufficiency of any performance by any party under any such contract or agreement or to take any action to collect or enforce any claim for payment assigned hereunder and (iv) the Bank shall not be under any duty to send notices, perform services, exercise any rights of collection, enforcement, conversion or exchange, vote, pay for insurance, taxes or other charges or take any action of any kind in connection with the management of the Collateral.

 

(h)            The Borrower agrees that it shall (i) at all times (1) with respect to the Collateral constituting the Custody Account and the Custody Assets, cause the Bank to have a perfected Security Interest in such Collateral, which Security Interest shall be, other than with respect to the Liens permitted by Section 7.2(e) of the Credit Agreement, prior to all other Liens, and (2) with respect to all other Collateral in which a Security Interest may be perfected by filing a financing statement, cause the Bank to have a perfected Security Interest in such Collateral, which Security Interest shall be prior to all Liens other than the Liens permitted by Section 7.2(f) of the Credit Agreement, and (ii) not cause or permit any of the Collateral (1) to be subject to any Lien other than Permitted Liens, or (2) to be subject to any Lien (other than Permitted Charges) that has any priority over the Security Interest granted hereby.

 

Section 5.       Voting and Distributions

 

(a)            Unless and until an Event of Default shall have occurred and be continuing and the Bank shall have delivered to the Borrower a written notice of its intention to exercise the voting and/or other consensual rights and powers referred to in this Section 5 (a “Collateral Notice”):

 

(i)            The Borrower shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of the Collateral owned or held by it or on its behalf, or any part thereof, for any purpose consistent with the terms of this Security Agreement and the other Loan Documents; provided, however, that the Borrower will not exercise any such right if the result thereof would materially and adversely affect the rights inuring to a holder of the Collateral or the rights and remedies of the Bank under this Security Agreement or any other Loan Document or the ability of the Bank to exercise the same.

 

 

(ii)           The Bank shall execute and deliver to the Borrower, or cause to be executed and delivered to the Borrower, all such proxies, powers of attorney and other instruments as the Borrower may reasonably request for the purpose of enabling it to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to Section 5(a)(i) and to receive the cash payments it is entitled to receive pursuant to Section 5(a)(iii).

 

(iii)          Subject to the Security Interest created hereby and the terms and conditions of the Loan Documents, the Borrower shall be entitled to receive, retain and use any and all dividends, distributions, interest and principal paid on, and Proceeds of, the Collateral owned or held by it or on its behalf.

 

(b)           Upon receipt by the Borrower of a Collateral Notice upon the occurrence of, or at any time during the continuance of, an Event of Default:

 

(i)            To the extent not prohibited by applicable law, all rights of the Borrower to receive and retain dividends, distributions, interest and principal paid on, and Proceeds of, the Collateral that it is authorized to receive pursuant to Section 5(a)(iii) shall cease, and all such rights shall thereupon become vested in the Bank, which shall have the sole and exclusive right and authority to receive and retain such dividends, distributions, interest, principal and Proceeds, as applicable. All dividends, distributions, interest, principal and Proceeds received by or on behalf of the Borrower contrary to the provisions of this Section shall be held in trust for the benefit of the Bank, shall be segregated from other property or funds of the Borrower and shall be forthwith delivered to the Bank or the Custodian upon demand in the same form as so received (with any necessary endorsement). Any and all money and other property paid over to or received by the Bank pursuant to the provisions of this subsection (i) shall be retained by the Bank in an account to be established in the name of the Bank upon receipt of such money or other property. Subject to the provisions of this subsection (i), such account shall at all times be under the sole dominion and control of the Bank, and the Bank shall at all times have the sole right to make withdrawals therefrom and to exercise all rights with respect to the funds and other property from time to time therein or credited thereto, provided that such funds or other property shall not be withdrawn or applied for any purpose other than toward the payment of the Obligations.

 

(ii)           To the extent not prohibited under applicable law, all rights of the Borrower to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section 5(a)(i), and the obligations of the Bank under Section 5(a)(ii), shall cease, and all such rights shall thereupon become vested in the Bank, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, provided that the Bank shall have the right from time to time to permit the Borrower to exercise such rights.

 

 

Section 6.       Remedies

 

(a)            Upon the occurrence of an Event of Default or at any time thereafter during the continuance thereof, the Bank may:

 

(i)            exercise any and all rights and remedies (x) granted to a Secured Party by the NYUCC or otherwise allowed at law, and/or (y) otherwise provided by this Security Agreement, and

 

(ii)           dispose of the Collateral as it may choose, so long as every aspect of the disposition, including the method, manner, time, place and terms thereof, is commercially reasonable, and the Borrower agrees that, without limitation, the following are each commercially reasonable: (x) if the Bank is required by law to give any notice of disposition of the Collateral, the Bank shall not in any event be required to give more than two (2) Business Days’ prior notice to the Borrower of any such disposition, (y) any place within the City of New York may be designated by the Bank for disposition, and (z) the Bank may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

 

(b)           To the extent permitted by law, the Borrower hereby expressly waives and covenants not to assert any appraisement, valuation, stay, extension, redemption or similar laws, now or at any time hereafter in force, which might delay, prevent or otherwise impede the performance or enforcement of this Security Agreement.

 

(c)           In view of the position of the Borrower in relation to the Collateral, or because of other current or future circumstances, a question may arise under the Securities Act or any similar applicable law of any other Governmental Authority analogous in purpose or effect (such Act and any such similar law as from time to time in effect being called the “Securities Laws”) with respect to any disposition of the Collateral permitted hereunder. The Borrower understands that compliance with the Securities Laws might very strictly limit the course of conduct of the Bank if the Bank were to attempt to dispose of all or any part of the Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Bank in any attempt to dispose of all or part of the Collateral under applicable “blue sky” or other state securities laws or similar laws analogous in purpose or effect. The Borrower recognizes that in light of such restrictions and limitations the Bank may, with respect to any sale of Collateral to which such restrictions or limitations may (in the reasonable judgment of the Bank) apply, limit the purchasers to those who will agree, among other things, to acquire such Collateral for their own account, for investment, and not with a view to the distribution or resale thereof. The Borrower acknowledges and agrees that in light of such restrictions and limitations, the Bank, in its sole and absolute discretion, (i) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Collateral, or any part thereof, shall have been filed under the Securities Laws and (ii) may approach and negotiate with a single potential purchaser to effect such sale. The Borrower acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Bank shall incur no responsibility or liability for selling all or any part of the Collateral at a price that the Bank may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Bank sells any such Collateral.

 

 

(d)           The Bank agrees with the Borrower that it shall not deliver any Collateral Control Notice at any time when no Event of Default exists.

 

Section 7.       Notices

 

(a)           All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, to the appropriate party hereto at the address therefor set forth in the Credit Agreement.

 

(b)           All notices and other communications given to any party hereto in accordance with the provisions of this Security Agreement shall be deemed to have been given on the date of receipt.

 

Section 8.       Waivers; Amendments

 

Subject to the terms of the Credit Agreement, neither this Security Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Bank.

 

Section 9.       Successors and Assigns

 

Subject to the terms of the Credit Agreement, the provisions of this Security Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted under the Credit Agreement, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Bank (and any attempted assignment or transfer by the Borrower without such consent shall be null and void). Nothing in this Security Agreement, expressed or implied, shall be construed to confer upon any Person (other than the Bank and the Related Parties thereof) any legal or equitable right, remedy or claim.

 

Section 10.     Counterparts; Integration

 

This Security Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which, when taken together, shall constitute but one contract. This Security Agreement constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

 

 

Section 11.     Severability

 

In the event any one or more of the provisions contained in this Security Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

Section 12.     Governing Law

 

This Security Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Section 13.     WAIVER OF JURY TRIAL

 

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 14.     Headings

 

Article and Section headings used herein are for convenience of reference only, are not part of this Security Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Security Agreement.

 

Section 15.     Relationship to Credit Agreement

 

This Security Agreement is the “Security Agreement” under, and as such term is defined in, the Credit Agreement, and is subject to, and shall be construed in accordance with, the provisions thereof applicable hereto.

 

 

Section 16.     Release of Collateral

 

(a)            Upon the request of the Borrower following the later to occur of (i) the earlier to occur of the Commitment Termination Date or such other date as the Borrower shall voluntarily terminate the Commitment in accordance with the terms of the Credit Agreement, and (ii) the payment in full of the Note and the performance by the Borrower of all of the Obligations and its other liabilities under the Loan Documents outstanding at the time of such payment, the Bank shall (x) return or cause to be returned to the Borrower all Collateral which shall remain in the possession of the Bank at such time, and (y) at the sole cost and expense of the Borrower deliver to the Borrower such instruments, UCC termination statements and other documents, and provide for the delivery of such instructions to the Custodian, in each case as the Borrower may reasonably request for the purpose of releasing (in fact and as a matter of record) the Security Interest created by this Security Agreement.

 

(b)           In the event that the Borrower shall sell, transfer or otherwise dispose of all or any portion of the Collateral (each a “Transfer”), then provided that immediately before and after giving effect thereto no Default shall or would exist, (i) the Bank’s Security Interest created hereby in the Collateral subject to such Transfer shall automatically be released (provided that such Security Interest shall attach to the Proceeds of such Transfer), and (ii) promptly after the request by the Borrower, the Bank shall, at the sole cost and expense of the Borrower deliver to the Borrower such instruments, UCC termination statements and other documents, and provide for the delivery of such instructions to the Custodian, in each case as the Borrower may reasonably request for the purpose of releasing (in fact and as a matter of record) the Security Interest in the Collateral subject to such Transfer.

 

Section 17.     Liability

 

No Non-Recourse Person shall have any personal liability for any obligation of the Borrower hereunder, and no claim against any Non-Recourse Person or any property thereof may be made for any obligation of the Borrower hereunder.

 

[the remainder of this page has been intentionally left blank

 

 

IN WITNESS WHEREOF, each party hereto has caused this Security Agreement to be executed by its duly authorized representative as of the day and year first above written.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
     
  By:  
  Name: P. Bradley Adams
  Title: CEO
     
  THE BANK OF NOVA SCOTIA
     
  By:       
  Name: Eli Mou
  Title: Director and Execution Head

  

Tortoise Power and Energy Infrastructure Fund, Inc. – Security Agreement

 

 

ANNEX TO SECURITY AGREEMENT

 

Attach Financing Statement(s)

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT H

 

FORM OF CONTROL AGREEMENT

 

CONTROL AGREEMENT, dated as of May 17, 2016 (as amended, supplemented or otherwise modified from time to time, this “Control Agreement”), among Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), U.S. Bank, N.A., as custodian for the Borrower (in such capacity, the “Custodian”), and The Bank of Nova Scotia (the “Bank”).

 

RECITALS

 

I.             This Control Agreement is entered into pursuant to that certain Credit Agreement, dated as of May 17, 2016 (as the same may be amended, supplemented or otherwise modified from time to time), by and between Borrower and Bank (the “Credit Agreement”).

 

II.            To secure the Borrower’s obligations under the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement), the Borrower granted to the Bank a security interest in and lien upon (the “Security Interest”), among other things, all of the Borrower’s right, title and interest in and to the Account (as defined below) and all funds and other property from time to time held therein or credited thereto (collectively, the “Collateral”).

 

III.           The Borrower, the Bank and the Custodian are entering into this Control Agreement to perfect the above-mentioned security interest in the Collateral.

 

Section 1.               Establishment of Account. The Custodian hereby confirms and agrees that:

 

(a)           The Custodian, as custodian, entered into a Custody Agreement, dated as of July 28, 2009, as amended with the Borrower (the “Custody Agreement”).

 

(b)           The Custodian established, under and pursuant to the terms of the Custody Agreement, a single account (subject to the creation of sub-accounts under such account) in the name of the Borrower only (as the same may be redesignated, renumbered or otherwise modified, the “Account”).

 

(c)           The Account is composed of not less than two sub-accounts as follows: (i) a “securities account”, within the meaning of Section 8-501 of the UCC, entitled “Securities Account for the Bank of Nova Scotia, as pledgee of Tortoise Power and Energy Infrastructure Fund” (the “Securities Account”), and (ii) a “deposit account”, within the meaning of Section 9-102 of the UCC, entitled “Deposit Account for the Bank of Nova Scotia, as pledgee of Tortoise Power and Energy Infrastructure Fund” (the “Deposit Account”). As used herein, “UCC” means the Uniform Commercial Code of the State of New York as in effect on the date of this Control Agreement.

 

 

(d)           All property, other than cash, now or hereafter credited to or carried or deposited in the Account will be treated as a “financial asset” within the meaning of Section 8-102 UCC (“Financial Assets”) and held in the Securities Account. All cash now or hereafter credited to or carried or deposited in the Account will be held in the Deposit Account.

 

Section 2.             Representations and Warranties of the Custodian. The Custodian hereby makes the following representations and warranties (provided that, notwithstanding anything to the contrary herein contained, the Custodian makes no representation or warranty with respect to the creation or enforceability of any security interest in the Account or the Collateral):

 

(a)           This Control Agreement is the legal, valid and binding obligation of the Custodian.

 

(b)           On the date of this Control Agreement, except as provided in Section 6 hereof, the Custodian has not in any way recognized any ownership or other interest in, or claim to, the Account, any part thereof or any item held therein (other than the interests of the Bank hereunder and of the Borrower) or agreed to take instructions from any person (other than the Borrower, its transfer agent and Bank) with respect thereto.

 

(c)            With respect to the Securities Account and the Financial Assets, the Custodian is a “securities intermediary” within the meaning of Section 8-102 of the UCC, and with respect to the Deposit Account and all cash therein, the Custodian is a “bank” within the meaning of Section 9-102 of the UCC.

 

Section 3.               Control of the Account

 

(a)           The Borrower irrevocably authorizes and directs the Custodian, and the Custodian agrees, to comply with each “entitlement order” within the meaning of Section 8-102 of the UCC (each an “Entitlement Order”) and all instructions with respect to the disposition of funds in the Deposit Account, in either case with respect to the Collateral received by the Custodian in writing from the Bank, without further notice to, or consent from, the Borrower. Except as otherwise provided in Section 3(b), the Borrower retains the right to withdraw funds from the Account and to give instructions and Entitlement Orders to the Custodian with respect to the Collateral.

 

(b)           Prior to a Period of Exclusive Control (defined below), the Custodian is entitled to rely on instructions and Entitlement Orders with respect to the Collateral from the Borrower. The Borrower and the Custodian irrevocably agree that, upon the commencement of and at all times during the continuation of each Period of Exclusive Control, the Custodian shall (i) cease to accept any and all instructions and Entitlement Orders with respect to the Collateral from the Borrower or any other person (other than the Bank), and (ii) accept all instructions and Entitlement Orders with respect to the Collateral from the Bank. For purposes hereof, a “Period of Exclusive Control” means any period commencing promptly (but in no event in excess of one business day) after the receipt by the Custodian of a notice in substantially the form of Annex A attached hereto (a “Notice of Exclusive Control”) from the Bank and ending at such time, if any, as the Custodian shall have received a written notice from the Bank terminating or rescinding such Notice of Exclusive Control.

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(c)            The Custodian shall have no responsibility or liability to the Borrower for complying with a Notice of Exclusive Control or complying with Entitlement Orders or other instructions originated by the Bank with respect to the Account or any Collateral therein. The Custodian shall have no duty to investigate or make any determination as to whether the Bank has the right to issue any Notice of Exclusive Control or exercise any other right or remedy, and the Custodian shall be fully protected in complying with a Notice of Exclusive Control whether or not the Borrower may allege that no such right exists.

 

(d)           Notwithstanding any provision contained in this Agreement to the contrary, in the event of a dispute between the Borrower and the Bank concerning this Agreement or the disposition of the Account or the Collateral (including, but not limited to, conflicting instructions from the Borrower and the Bank) the Custodian shall have the absolute right to act in accordance with Entitlement Orders and other instructions given by or on behalf of the Bank.

 

(e)           All notices, Entitlement Orders, and instructions from the Bank to the Custodian under or pursuant to this Agreement shall be made by an Authorized Signatory. For purposes hereof, “Authorized Signatory” means any person listed on the incumbency certificate (in the form attached hereto as Annex B) then most recently delivered by the Bank to the Custodian or accompanying such notice, Entitlement Order or instruction.

 

Section 4.               Account Statements

 

(a)           Custodian will make available to Borrower and the Bank by use of a secured web site (“Trust Essentials NOW”) all releases and substitutions of Collateral effected hereunder within one business day of such release or substitution. Within five business days of the end of each calendar month, and by use of Trust Essentials NOW, the Custodian will make available to the Bank and Borrower, an Account statement as of the end of such month. Upon the request of the Bank, the Custodian will promptly provide to the Bank such other information concerning the Account and/or the Collateral as the Bank may reasonably request, provided that nothing herein contained shall obligate the Custodian to provide to the Bank any such information with respect to the Account to the extent that (i) it is not obligated to provide such information to the Borrower and (ii) it does not otherwise provide such information to the Borrower.

 

(b)           The Custodian agrees that it will not report, and is not responsible for reporting, any items of interest and other income recognized in the Account to any applicable taxing authorities.

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Section 5.               Other Agreements

 

Each of the Borrower and the Custodian agree not to identify in its books and records, or otherwise, any person as having an interest in, or claim to, or rights to give instruction or Entitlement Orders with respect to, or right to receive any value distributed on account of, the Collateral or any portion thereof, or to agree so to do, except: (i) the Borrower and the Custodian may enter into, and perform their respective obligations under, this Control Agreement and the Custody Agreement, and (ii) to the extent required by law.

 

Section 6.               Subordination of Lien, Set-Off and Recoupment

 

The Custodian hereby agrees that any security interest in or lien on, or right of set-off or recoupment with respect to, any of the Collateral that the Custodian has or may have in the future under the Custody Agreement or at law (collectively, a “Collateral Claim”) is hereby subordinated to the Security Interest in all respects, except to the extent of any advances of cash or securities that the Custodian may from time to time make to, or for the benefit of, the Borrower under the Custody Agreement for purposes of clearing or settling purchases or sales of securities by the Borrower. In the event that the Custodian shall receive or take any payment or other sum in respect of a Collateral Claim at any time prior to the termination or other extinguishment of this Agreement as herein provided, the Custodian shall immediately either turn over such payment or other sum to the Bank for the account of the relevant secured parties or deposit or otherwise recredit the same to the Account, provided that the Custodian may retain each such payment or other sum to the extent of (i) all reasonable, documented, out-of-pocket usual and customary charges, fees and expenses of the Custodian incurred in connection with the performance of its duties hereunder and the routine maintenance and operation of the Account, (ii) the advances referenced above, and (iii) any amounts in the aggregate not in excess of $1,000,000, due and owing to the Custodian pursuant to Section 7(b) hereof.

 

Section 7.               Limitation of Liability; Expenses; Indemnification

 

(a)            The Custodian shall not be liable for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder or for its decisions relating to the Collateral in the absence of negligence or willful misconduct on its part. The Custodian shall also have no responsibility or liability with respect to changes in value of securities in the Account relative to other currencies or securities, or for any deduction, for taxes, levies or otherwise from deposits made with any depository, or for any blockage, confiscation, or expropriation, limitation of transferability or any other action by any government, de facto or de jure, which affects or could affect the same.

 

(b)          The Borrower hereby agrees to indemnify and hold harmless the Custodian against any claims, liabilities, expenses or losses (including reasonable, documented, out-of-pocket attorneys’ fees and disbursements of one outside counsel) in any way arising out of or related to this Control Agreement, except to the extent that such claims, liabilities, expenses or losses are caused by the negligence or willful misconduct of the Custodian. The provisions of this Section shall survive the termination of this Control Agreement.

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(c)            In addition to the terms of the Custody Agreement (without duplication), the Borrower hereby agrees to pay and reimburse the Custodian for any reasonable, documented, out-of-pocket advances, costs, expenses (including, without limitation, reasonable, documented, out-of-pocket attorney’s fees and costs of one outside counsel) and disbursements that may be paid or incurred by the Custodian in connection with this Agreement or the arrangement contemplated hereby, including any that may be incurred in performing its duties or responsibilities pursuant to the terms of this Agreement, in the absence of negligence or willful misconduct on the part of the Custodian.

 

(d)           As between the Bank and the Custodian, notwithstanding any provision contained in this Control Agreement to the contrary, the Custodian shall not be liable for any action taken or omitted to be taken by it at the instruction (whether or not in the form of an Entitlement Order or otherwise) of the Bank under this Control Agreement, except for the Custodian’s own gross negligence or willful misconduct in carrying out such instructions.

 

(e)           The Custodian shall have no responsibility or liability hereunder to the Borrower or to the Bank for acting in accordance with any judicial process, order, writ, judgment, decree or claim of lien (other than a claim of lien to the extent arising as a result of a breach of this Control Agreement by the Custodian) relating to the Collateral or the Account notwithstanding that such order or process is subsequently modified, vacated or otherwise determined to have been without legal force or effect.

 

(f)            The Borrower shall not be liable for any indirect, special, consequential, punitive or exemplary damages or for any lost profits, whether or not the likelihood of such damages was known to the Borrower, and regardless of the form of the claim or action, or the legal theory on which it is based.

 

Section 8.               Notices

 

Any notice, request or other communication required or permitted to be given under this Control Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by facsimile or other electronic means and electronic confirmation of error free receipt is received or two days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the following address (any party may change its address in the manner set forth in this Section):

 

if to the Borrower, to it at 11550 Ash Street, Suite 300, Leawood, KS 66211, Attention: Brad Adams, (Telephone: (913) 981-1020; Facsimile: (913) 981-1021; E-mail: badams@tortoiseadvisors.com);

 

if to the Custodian, to it at 1555 N. Rivercenter Dr., MK-WI-S302, Milwaukee, WI 53212, Attention: Tom Fuller (Telephone: (414) 905-6118; Facsimile: (866) 350-5066); and 

5

 

if to the Bank, to it at 40 King Street West, 55th Floor, Toronto, ON Canada M5H 1H1, Attention: Eli Mou (Telephone: (416) 350-1178; Facsimile: (416) 350-1161; e-mail address: eli.mou@scotiabank.com and (ii) in the case of all notices and other communications pursuant to Article 2, with a copy to 720 King Street West, 2nd Floor, Toronto, ON Canada M5 2T3, Attention: GWS LoanOps US Corp (Telephone: (212) 225-5705; Facsimile: (212) 225-5709; e-mail address: GWSLoanOps.USCorp@scotiabank.com).

 

Section 9.               Choice of Law

 

This Control Agreement shall be governed by the laws of the State of New York and, notwithstanding anything to the contrary contained in any agreement governing the Account, for purposes of the UCC, including any successor thereto, the State of New York shall be deemed to be the Custodian’s jurisdiction (within the meaning of Sections 8-110(e), 9-304(b) and 9-305(b) of the UCC) and notwithstanding that any agreement between the Custodian and the Borrower governing the Account may expressly provide that a particular jurisdiction other than the State of New York is the Custodian’s jurisdiction for purposes of Section 8-110(e) of the UCC, the Custodian and the Borrower agree that those agreements are hereby amended such that the Custodian’s jurisdiction (within the meaning of Section 8-110(e) of the UCC) for purposes of those agreements is the State of New York.

 

Section 10.             Counterparts

 

This Control Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which, taken together, shall constitute but one contract. Delivery of an executed counterpart of this Control Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Control Agreement.

 

Section 11.             WAIVER OF JURY TRIAL

 

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS CONTROL AGREEMENT. EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS CONTROL AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 

6

 

Section 12.             Miscellaneous

 

(a)           This Control Agreement does not create any obligation or duty of the Custodian other than those expressly set forth herein. As between the Borrower and the Custodian, except for the rights of control in favor of the Bank agreed to herein, nothing herein shall be deemed to modify, limit, restrict, amend or supersede the terms of the Custody Agreement, and Custodian shall be and remain entitled to all of the rights, indemnities, powers, and protections in its favor under the Custody Agreement.

 

(b)           No amendment, supplement or other modification of this Control Agreement, or any waiver of any right hereunder, shall be binding on any party to this Control Agreement, unless it is in writing and signed by each of the parties to this Control Agreement.

 

(c)           Section headings have been inserted in this Control Agreement for convenience only and shall not affect the construction of, or be taken into consideration in interpreting, this Control Agreement.

 

(d)           In the event any one or more of the provisions contained in this Control Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid, legal and enforceable provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

(e)           The provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

(f)            This Control Agreement and the exhibits hereto constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.

 

(g)           This Control Agreement shall remain in effect until terminated by written notice by (i) the Custodian to the Bank, with a copy to the Borrower, at least thirty (30) days in advance, and, at the end of such 30 day period (or such earlier date as the parties hereto may agree), the Custodian shall transfer all assets and other property in the Account to (1) a successor custodian (that shall have entered into a control agreement with the Borrower and the Bank in all respects satisfactory to the Bank) designated by the Borrower and acceptable to the Bank, or (2) if clause (1) is not satisfied, the Bank, or (ii) the Bank to the Custodian, with a copy to the Borrower. Any other termination or any amendment, supplement or other modification to this Agreement shall be effected solely by an instrument in writing executed by all the parties hereto. 

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(h)           The Custodian shall not be liable under this Control Agreement for delays, errors or losses occurring by reason of circumstances beyond its control, including, without limitation, acts of God, market disorder, terrorism, insurrection, war, riots, failure of transportation or equipment, or failure of vendors, communication or power supply. In no event shall the Custodian be liable to any person for consequential or special damages, even if the Custodian has been advised of the possibility or likelihood of such damages.

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IN WITNESS WHEREOF, the parties hereto have executed this Control Agreement as of the date first above mentioned.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC., as Borrower
     
  By:  
  Name: P. Bradley Adams
  Title: CEO

 

  U.S. BANK, N.A., as Custodian

 

  By:  
  Name:                            
  Title:                            

  

  THE BANK OF NOVA SCOTIA, as Bank
     
  By:       
  Name: Eli Mou
  Title: Director and Execution Head

  

Tortoise Power and Energy Infrastructure Fund, Inc. - Control Agreement

 

 

ANNEX A

TO

CONTROL AGREEMENT

 

[Letterhead of The Bank of Nova Scotia]

 

[Month] __, 201__

 

U.S. Bank, N.A.

1555 N. Rivercenter Dr., MK-WI-S302

Milwaukee, WI 53212

ATTN: Tom Fuller

 

Re: Notice of Exclusive Control

 

Ladies/Gentlemen:

 

Reference is made to the Control Agreement (as amended, supplemented or otherwise modified from time to time, the “Control Agreement”), dated as of May 17, 2016, among Tortoise Power and Energy Infrastructure Fund, Inc. (the “Borrower”), U.S. Bank, N.A. (the “Custodian” or “you”), and The Bank of Nova Scotia, as Bank (the “Bank”). Capitalized terms used herein and not defined herein, shall have the meanings assigned to such terms in the Control Agreement.

 

We hereby give you notice of our exclusive control over the Account and all funds and other property from time to time held therein or credited thereto. In accordance with Section 3(b) of the Control Agreement you are instructed to promptly (but in no event in excess of one business day) after your receipt of this Notice of Exclusive Control to cease to accept any and all instructions and Entitlement Orders with respect to the Collateral from the Borrower or any other person (other than the Bank).

 

You are instructed to deliver a copy of this notice by facsimile transmission to the Borrower.

 

  Very truly yours,
   
  THE BANK OF NOVA SCOTIA, as Bank

 

  By:  
  Name:                            
  Title:                            

 

 

ANNEX B

TO

CONTROL AGREEMENT

 

Reference is made to the Control Agreement (as amended, supplemented or otherwise modified from time to time, the “Control Agreement”), dated as of May 17, 2016, among Tortoise Power and Energy Infrastructure Fund, Inc. (the “Borrower”), U.S. Bank, N.A. (the “Custodian” or “you”), and The Bank of Nova Scotia, as Bank (the “Bank”). Capitalized terms used herein and not defined herein, shall have the meanings assigned to such terms in the Control Agreement.

 

Authorized Signatories for the Bank

 

The Custodian is authorized to accept and act upon written instructions, Entitlement Orders or notices received from any one of the following persons at the Bank:

 

Name   Telephone/Facsimile   Signature
         
1.   1. Telephone   1.  
    Facsimile      
2.   2. Telephone   2.            
    Facsimile      
3.   3. Telephone   3.  
    Facsimile      
4.   4. Telephone   4.  
    Facsimile      
5.   5. Telephone   5.  
    Facsimile      

 

Authorized by:    
  as authorized agent of the Bank  

 

  Name:    
  Title:    
  Date:    

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT I

 

FORM OF APPLICABLE MARGIN CHANGE NOTICE

 

[Date]

 

Tortoise Power and Energy Infrastructure Fund

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brad Adams

 

Reference is hereby made to that certain Credit Agreement, dated as of May 17, 2016 (such agreement, as amended and in effect from time to time, the “Credit Agreement”), between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation, and The Bank of Nova Scotia.

 

This is an “Applicable Margin Change Notice” under, as defined in, and with the effect set forth in, the Credit Agreement. The Applicable Margin Change Effective Date shall be [the 179th day after the date hereof] [or] [____________, 20__]1.

 

New Applicable ABR Margin” means ___%.

 

New Applicable Fixed Rate Margin” means ___%.

 

New Applicable LIBOR Margin” means ___%.

 

New Applicable Overnight Margin” means ___%.

 

  THE BANK OF NOVA SCOTIA, as Bank

 

  By:  
  Name:                            
  Title:                            

 

  

 

1 The Bank may, in its discretion, set the Applicable Margin Change Effective Date to be later than 180 days from the date of this Applicable Margin Change Notice. 

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT J

 

FORM OF COMMITMENT FEE CHANGE NOTICE

 

[Date]

 

Tortoise Power and Energy Infrastructure Fund

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brad Adams

 

Reference is hereby made to that certain Credit Agreement, dated as of May 17, 2016 (such agreement, as amended and in effect from time to time, the “Credit Agreement”), between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation, and The Bank of Nova Scotia.

 

This is a “Commitment Fee Change Notice” under, as defined in, and with the effect set forth in, the Credit Agreement. The Commitment Fee Change Effective Date shall be [the 179th day after the date hereof] [or] [____________, 20__]1.

 

New Commitment Fee Rate” means ___%.

 

  THE BANK OF NOVA SCOTIA, as Bank

 

  By:  
  Name:                            
  Title:                            

  

 

1 The Bank may, in its discretion, set the Commitment Fee Change Effective Date to be later than 180 days from the date of this Commitment Fee Change Notice. 

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT K

 

FORM OF COMMITMENT TERMINATION NOTICE

 

[Date]

 

Tortoise Power and Energy Infrastructure Fund, Inc.

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brad Adams

 

Reference is hereby made to that certain Credit Agreement, dated as of May 17, 2016 (such agreement, as amended and in effect from time to time, the “Credit Agreement”), between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation and The Bank of Nova Scotia.

 

This is a “Commitment Termination Notice” under, as defined in, and with the effect set forth in, the Credit Agreement.

 

  THE BANK OF NOVA SCOTIA, as Bank

 

  By:  
  Name:                            
  Title:                            

 

 

Exhibit (b)(1)(ii)

 

EXECUTION COPY

 

AMENDMENT NO. 1 TO CREDIT AGREEMENT

 

AMENDMENT NO. 1, dated as of December 1, 2017, (this “Amendment”), to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), and The Bank of Nova Scotia (the “Bank) (as the same may be further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”).

 

RECITALS

 

I.              Each term that is defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

II.            Tortoise Capital Advisors, LLC (“Tortoise”), an Affiliate of Mariner Holdings, LLC, is the Investment Adviser to the Borrower. Mariner Holdings, LLC has entered into an agreement with Lovell Minnick Partners, LLC that will result in the termination of its affiliation with Tortoise (the “Transaction”). As a result of the Transaction, Tortoise will become an Affiliate of Lovell Minnick Partners, LLC.

 

III.           The Borrower desires to amend the Credit Agreement upon the terms and conditions herein contained in contemplation of the Transaction, and the Bank has agreed thereto upon the terms and conditions herein contained.

 

AGREEMENTS

 

Accordingly, in consideration of the Recitals and the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Section 1.1 of the Credit Agreement is hereby amended by inserting the following defined term in its appropriate alphabetical order:

 

Amendment No. 1 Effective Date” means the “Amendment Effective Date”, as defined by Amendment No. 1 to this Credit Agreement.

 

Change of Control” means the occurrence of one or more of the following events on or after the Amendment No. 1 Effective Date: (a) the failure of the Investment Adviser to be an Affiliate of Lovell Minnick Partners LLC, a Delaware limited liability company (the “Parent”); (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions), including by way of merger or consolidation, of all or substantially all of the assets of the Investment Adviser or, together with any Affiliates thereof, the Parent to any Person or group of related Persons (other than another Affiliate of the Parent) for purposes of Section 13(d) of the Securities Exchange Act of 1934 (a “Group”); (c) the approval by the board of directors, board of trustees or other managing body of, or the holders of equity interests issued by, the Parent or the Investment Adviser of any plan or proposal for the liquidation or dissolution of the Parent or the Investment Adviser, as the case may be; or (d) any Person or Group shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 25% of the aggregate ordinary voting power represented by the equity interests issued by the Parent. 

 

 

2.             Section 8.1(k)(i) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(i)          the Investment Adviser shall fail to be an Affiliate of Mariner Holdings, LLC, or Lovell Minnick Partners LLC, a Delaware limited liability company,

 

3.            Section 8.1(l) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(l)          a Change of Control shall occur on any date that the Investment Adviser shall fail to be an Affiliate of Mariner Holdings, LLC;

 

4.            Paragraphs 1 through 3 of this Amendment shall not be effective until each of the following conditions is satisfied (the date, if any, on which such conditions shall have first been satisfied being referred to herein as the “Amendment Effective Date”):

 

(a)         the Bank shall have received from the Borrower either (i) a counterpart of this Amendment executed on behalf of the Borrower or (ii) written evidence satisfactory to the Bank (which may include telecopy transmission of a signed signature page of this Amendment) that the Borrower has executed a counterpart of this Amendment;

 

(b)         the Bank shall have received a certificate of the Secretary or Assistant Secretary of the Borrower, dated the Amendment Effective Date, in form and substance reasonably satisfactory to the Bank (i) certifying that the Borrower’s Organization Documents have not been amended or modified since May 17, 2016, or if so, attaching a true, correct and complete copy of each amendment or modification thereof, and (ii) certifying as to the incumbency of the Borrower’s officer or officers who may sign this Amendment, including therein a signature specimen of such officer or officers;

 

(c)         the Bank shall have received such documents and information as the Bank shall have requested in order to comply with “know-your-customer” and other anti-terrorism, anti-money laundering and similar rules and regulations and related policies; and

 

(d)         the Borrower shall have paid all reasonable and documented out-of-pocket fees and disbursements incurred by the Bank (including, without limitation, legal fees and disbursements of counsel to the Bank) in connection herewith.

 

5.          The Borrower (a) reaffirms and admits the validity and enforceability of each Loan Document to which it is a party and all of its obligations thereunder and agrees and admits that (i) it has no defense to any such obligation and (ii) it shall not exercise any setoff or offset to any such obligation, and (b)(1) represents and warrants that, as of the date of execution and delivery hereof by the Borrower, no Default has occurred and is continuing and (2) the representations and warranties of the Borrower contained in the Credit Agreement and the other Loan Documents are true on and as of the date hereof with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

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6.            In all other respects, the Loan Documents shall remain in full force and effect, and no amendment in respect of any term or condition of any Loan Document shall be deemed to be an amendment in respect of any other term or condition contained in any Loan Document.

 

7.            This Amendment may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. It shall not be necessary in making proof of this Amendment to produce or account for more than one counterpart signed by the party to be charged.

 

8.            THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

[the remainder of this page has been intentionally left blank

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
     
  By: /s/ P. Bradley Adams
  Name: P. Bradley Adams
  Title: Chief Executive Officer, Principal Financial Officer and Treasurer

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 1 to Credit Agreement

 

 

  THE BANK OF NOVA SCOTIA
     
  By: /s/ Paul Meehan
  Name: Paul Meehan
  Title: Director

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 1 to Credit Agreement

 

 

Exhibit (b)(1)(iii)

 

EXECUTION VERSION

 

AMENDMENT NO. 2 AND WAIVER NO. 1 

TO CREDIT AGREEMENT

 

AMENDMENT NO. 2 AND WAIVER NO. 1, dated as of October 30, 2020 (this “Amendment”), to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), and The Bank of Nova Scotia (the “Bank”), as amended by Amendment No. 1, dated as of December 1, 2017 (as the same may be further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”).

 

RECITALS

 

I.              Each term that is defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

II.            The Borrower requested an amendment and waiver under the Credit Agreement upon the terms and conditions herein contained, and the Bank has agreed thereto upon the terms and conditions herein contained.

 

AGREEMENTS

 

Accordingly, in consideration of the Recitals and the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             The Borrower acknowledges and agrees that during the period from March 20, 2020 to March 31, 2020, the Borrower’s Adjusted Asset Coverage was less than 3.00:1.00, which constitutes a failure to observe or perform a covenant under Section 7.7(a) of the Credit Agreement and a Default under the Credit Agreement (the “Coverage Default”).

 

2.             The Bank hereby waives the Coverage Default.

 

3.             Section 1.1 of the Credit Agreement is hereby amended by inserting the following defined terms in their appropriate alphabetical order:

 

Commitment Extension Request” means a request from the Borrower to the Bank substantially in the form of Exhibit I.

 

Pricing Change Date” means November 14, 2020.

 

Scheduled Commitment Termination Date” means October 28, 2021, or such later Scheduled Commitment Termination Date as stated in the most recently effective Commitment Extension Request.

 

Screen Rate” means the rate appearing on Reuters “LIBOR01” screen displaying interest rates for Dollar deposits in the London interbank market (or on any successor or substitute page on such screen), provided that in the event such rate does not appear on such screen (or on any successor or substitute page on such screen or otherwise on such screen), the Screen Rate shall be determined by reference to such other comparable publicly available service for displaying interest rates applicable to Dollar deposits in the London interbank market as may be selected by the Bank.

 

 

4.             Each of the following defined terms contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

Applicable Margin” means (a) prior to the Pricing Change Date, a rate per annum equal to (i) with respect to each ABR Loan, 0.00%, and (ii) with respect to each Fixed Rate Loan, each LIBOR Loan and each Overnight Loan, 0.80%, (b) on and after the Pricing Change Date and prior to the first effective Commitment Extension Request, a rate per annum equal to (i) with respect to each ABR Loan, 0.00%, and (ii) with respect to each Fixed Rate Loan, each LIBOR Loan and each Overnight Loan, 1.10%, and (c) thereafter, a rate per annum equal to (i) with respect to each ABR Loan, the “Applicable Margin” therefor set forth in the then most recently effective Commitment Extension Request, and (ii) with respect to each Fixed Rate Loan, each LIBOR Loan and each Overnight Loan, the “Applicable Margin” therefor set forth in the then most recently effective Commitment Extension Request.

 

Commitment Fee Rate” means (a) prior to the Pricing Change Date, a rate per annum equal to (i) as of any date upon which the Loan Balance equals or exceeds 70% of the Commitment, 0.0%, and (ii) as of any other date, 0.20%, (b) on and after the Pricing Change Date and prior to the first effective Commitment Extension Request, a rate per annum equal to (i) as of any date upon which the Loan Balance equals or exceeds 75% of the Commitment, 0.15%, and (ii) as of any other date, 0.25%, and (c) thereafter, a rate per annum equal to the “Commitment Fee Rate” set forth in the then most recently effective Commitment Extension Request.

 

Commitment Termination Date” means the earlier to occur of (a) the Scheduled Commitment Termination Date and (b) such earlier date on which the Bank’s obligations to make Loans shall have otherwise terminated or been terminated in accordance herewith.

 

LIBO Rate” means, with respect to any LIBOR Loan for any Interest Period, the higher of (a) 0.00% and (b) the Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits with a maturity comparable to such Interest Period.

 

One-month Eurodollar Rate” means, with respect to any Overnight Loan as of any date, the higher of (a) 0.0%, and (b) the Screen Rate as of 11:00 a.m., London time, on such date for deposits with a one-month dollar maturity, provided that if the day for which such rate is to be determined is not a Business Day, the “One-month Eurodollar Rate” for such day shall be such rate on the immediately preceding Business Day.

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Overnight Eurodollar Rate” means, with respect to any ABR Loan as of any date, the higher of (a) 0.00% and (b) the Screen Rate as of 11:00 a.m., London time, on such date for deposits with an overnight dollar maturity, provided that if the day for which such rate is to be determined is not a Business Day, the “Overnight Eurodollar Rate” for such day shall be such rate on the immediately preceding Business Day.

 

5.             The defined term “Change in Circumstance” contained in Section 1.1 of the Credit Agreement is hereby amended by replacing the phrase “any Applicable Money Market” contained therein with the phrase “the London eurodollar market”.

 

6.             The defined term “Federal Funds Effective Rate” contained in Section 1.1 of the Credit Agreement is hereby amended by deleting the phrase “arranged by federal funds brokers” contained therein.

 

7.             The defined term “Loan Documents” contained in Section 1.1 of the Credit Agreement is hereby amended by inserting the phrase “each effective Commitment Extension Request” immediately after the phrase “the Note,” contained therein.

 

8.             The Credit Agreement is hereby amended by deleting in its entirety (a) each of Exhibit J and Exhibit K, (b) Section 2.9, and (c) each of the following defined terms contained in Section 1.1 thereof:

 

Applicable Margin Change Effective Date” 

Applicable Margin Change Notice” 

Applicable Money Market” 

Commitment Fee Change Effective Date” 

Commitment Fee Change Notice” 

Commitment Termination Notice” 

Commitment Termination Notice Effective Date” 

Initial Fee Period” 

Initial Margin Period” 

Maturity Date” 

Subsequent Fee Period” 

Subsequent Margin Period

 

9.             Each of Sections 2.2(b) and 2.5(a) of the Credit Agreement is hereby amended by replacing the phrase “Maturity Date” with “Commitment Termination Date”.

 

10.           Section 2.4 of the Credit Agreement is hereby amended by (a) replacing the heading thereof with “Termination, Reduction and Extension of Commitment”, and (b) amending and restating Section 2.4(d) thereof as follows:

 

(d)            At any time and from time to time the Borrower may duly complete, execute and deliver to the Bank a Commitment Extension Request. The Bank may, in its sole and absolute discretion, accept such Commitment Extension Request by countersigning it and returning a signed copy thereof to the Borrower within ten (10) Business Days of the date thereof upon which such Commitment Extension Request shall be and become effective. In all other events, such Commitment Extension Request shall conclusively be deemed to be ineffective.

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11.           Section 3.5 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

3.5           Alternate Rate of Interest

 

(a)            If prior to the commencement of any Interest Period for a LIBOR Loan:

 

(i)            the Bank determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate for such Interest Period; or

 

(ii)           Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period, or

 

(iii)          the Bank determines (which determination shall be conclusive and binding absent manifest error) the LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to the Bank of making or maintaining such LIBOR Loan for such Interest Period;

 

then the Bank shall give notice thereof to the Borrower as promptly as practicable thereafter and, until the Bank notifies the Borrower that the circumstances giving rise to such notice no longer exist, (x) any request for the conversion of any Loan to, or continuation of any Loan as, a LIBOR Loan shall be ineffective, and (y) with respect to any request for a new Loan as a LIBOR Loan, such Loan shall instead be made as an Overnight Loan. Any LIBOR Loan outstanding at the commencement of any such suspension shall be converted at the end of the then current Interest Period for such LIBOR Loan into an Overnight Loan unless such suspension has then ended.

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(b)           Notwithstanding anything to the contrary in paragraph (a) above, if at any time the Bank determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in paragraph (a) above have arisen and such circumstances are unlikely to be temporary, (ii) the applicable supervisor or administrator (if any) of the LIBO Rate or a Governmental Authority having jurisdiction over the Bank has made a public statement identifying a specific date after which the LIBO Rate shall no longer be available or used for determining interest rates for loans in the U.S. commercial loan market, or (iii) the LIBO Rate is no longer a widely recognized benchmark rate for newly executed or amended (as applicable) loans in the U.S. commercial loan market, then the Bank may establish an alternate rate of interest to the LIBO Rate and related adjustments, in each case giving due consideration to any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto or any evolving or then existing prevailing U.S. commercial loan market convention for such alternate rate of interest and related adjustments at such time (the “LIBOR Replacement Rate”), but, for the avoidance of doubt, the related adjustments shall not include a reduction of the Applicable Margin. The LIBOR Replacement Rate shall become effective at 5:00 p.m. on the fifth (5th) Business Day after the Bank has provided a notice thereof to the Borrower, so long as the Bank has not received, by such time, written notice of objection to such LIBOR Replacement Rate, with reasonable explanations for such objection, from the Borrower. Until a LIBOR Replacement Rate shall be determined in accordance with this paragraph (b) (in the case of the circumstances described in clause (ii) or (iii) of the first sentence of this paragraph (b), only to the extent the LIBO Rate is not available or published at such time on a current basis), the provisions of the last paragraph of paragraph (a) immediately above shall apply to all LIBOR Loans. The LIBOR Replacement Rate shall, upon its effectiveness, replace the LIBO Rate for all purposes under the Loan Documents unless and until an event described in paragraph (a)(i), (a)(iii), (b)(i), (b)(ii) or (b)(iii) of this Section 3.5 occurs with respect to the LIBOR Replacement Rate and in which case, the provisions of the last paragraph of paragraph (a) immediately above shall apply to any Loans accruing interest at a rate based on the LIBOR Replacement Rate in the same manner as would apply to LIBOR Loans affected by the same circumstances. The LIBOR Replacement Rate shall be applied in a manner consistent with market practice or, to the extent such market practice is not administratively feasible for the Bank, in a manner as otherwise reasonably determined by the Bank. In no event shall the LIBOR Replacement Rate be less than zero for purposes of the Loan Documents.

 

(c)           If the Bank determines (which determination shall be conclusive and binding absent manifest error) that with respect to any ABR Loan or Overnight Loan (i) adequate and reasonable means do not exist for ascertaining the One-month Eurodollar Rate or the Overnight Eurodollar Rate, or (ii) dollar deposits for a period equal to either one day or one month are not being offered to banks in the London interbank eurodollar market for the applicable amounts, or (iii) the One-month Eurodollar Rate or the Overnight Eurodollar Rate does not or would not adequately and fairly reflect the cost to the Bank of funding ABR Loans or Overnight Loans; then the Bank shall give notice thereof to the Borrower as promptly as practicable thereafter and (x) each existing Overnight Loan shall be automatically converted to an ABR Loan, and (y) until the Bank notifies the Borrower that the circumstances giving rise to such notice no longer exist, (1) each request for an Overnight Loan shall instead be deemed to be a request for an ABR Loan, and (2) the Alternate Base Rate shall be determined without reference to clause (c) thereof.

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(d)           If at any time the Bank determines (which determination shall be conclusive absent manifest error) that (i) one or more circumstances described in paragraph (c) above have arisen and that such circumstance(s) are unlikely to be temporary, (ii) the circumstances set forth in clause (i) of this paragraph (d) have not arisen but the regulatory supervisor for the administrator of the One-month Eurodollar Rate or the Overnight Eurodollar Rate, or a Governmental Authority having jurisdiction over the Bank has made a public statement identifying a specific date after which the One-month Eurodollar Rate or the Overnight Eurodollar Rate shall no longer be used for determining interest rates for loans, or (iii) the One-month Eurodollar Rate or the Overnight Eurodollar Rate is no longer a widely recognized benchmark rate for newly originated loans in the U.S. loan market, the Bank shall give notice thereof to the Borrower as promptly as practicable; thereafter, the Bank may in consultation with the Borrower establish an alternate rate of interest to the One-month Eurodollar Rate (the “One-month Replacement Rate”) and an alternate rate of interest to the Overnight Eurodollar Rate (the “Overnight Replacement Rate” and, together with the One-month Replacement Rate, the “Replacement Rates”), in each case with related adjustments and giving due consideration to any selection or recommendation of a replacement rate or the mechanism for determining such a rate and/or adjustment by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto or any evolving or then existing prevailing U.S. commercial loan market convention for such alternate rate of interest and related adjustments at such time but, for the avoidance of doubt, the related adjustments shall not include a reduction of the Applicable Margin. Each Replacement Rate shall become effective at 5:00 p.m. on the fifth (5th) Business Day after the Bank has provided a notice thereof to the Borrower, so long as the Bank has not received, by such time, written notice of objection to such Replacement Rate, with reasonable explanations for such objection, from the Borrower. Effective immediately upon the Bank’s delivery of its notice as called for in the first sentence of this paragraph (d) and until such time as Replacement Rates shall be determined and become effective in accordance with this paragraph (d), (x) each existing Overnight Loan shall be automatically converted to an ABR Loan, and (y) until the Bank notifies the Borrower that the circumstances giving rise to such notice no longer exist, (1) each request for an Overnight Loan shall instead be deemed to be a request for an ABR Loan, and (2) the Alternate Base Rate shall be determined without reference to clause (c) thereof. The One-month Replacement Rate shall, upon its effectiveness, replace the One-month Eurodollar Rate for all purposes under the Loan Documents and the provisions of this paragraph (d) shall continue to apply, to the extent applicable, to the One-month Replacement Rate. The Overnight Replacement Rate shall, upon its effectiveness, replace the Overnight Eurodollar Rate for all purposes under the Loan Documents and the provisions of this paragraph (d) shall continue to apply, to the extent applicable, to the Overnight Replacement Rate. Each Replacement Rate shall be applied in a manner consistent with market practice or, to the extent such market practice is not administratively feasible for the Bank, in a manner as otherwise reasonably determined by the Bank. In no event shall any Replacement Rate be less than zero for the purposes of the Loan Documents.

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10.           Section 4.15(a)(ii) of the Credit Agreement is hereby amended by deleting the phrase “Sudan,” contained therein.

 

11.           Section 5.2(a) of the Credit Agreement is hereby amended by adding the phrase “immediately before and after giving effect to such Loan and the use of the proceeds thereof” immediately before the phrase “no Default”.

 

12.           Section 5.2 of the Credit Agreement is hereby amended by adding a new subsection (d) as follows:

 

(d)            After giving effect to the requested Loan, the Adjusted Asset Coverage would not be less than 3.00:1.00.

 

13.           Section 6.1(c) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(c)            [reserved];

 

14.           Section 7.3(a) of the Credit Agreement is hereby amended by inserting the phrase “divide,” immediately before the word “consolidate” contained therein.

 

15.           Section 7.7(a) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(a)            The Borrower will not permit there to occur any period of twenty (20) consecutive days during which both (i) the Adjusted Asset Coverage shall be less than 3.00:1.00, and (ii) one or more Loans or any principal thereof shall be outstanding.

 

16.           Section 8.1(d)(i) of the Credit Agreement is hereby amended by deleting the phrase “and such failure shall continue unremedied for a period of twenty consecutive days”.

 

17.           The first sentence of Section 9.13 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

The Bank agrees to use reasonable precautions to keep confidential, in accordance with the Bank’s customary procedures for handling confidential information of the same nature, all non-public information supplied by the Borrower pursuant to this Credit Agreement which (a)(i) is clearly identified by such Person as being confidential at the time the same is delivered to the Bank, or (ii) constitutes any financial statement, list of investments or other assets, financial projections or forecasts, budget, compliance certificate, audit report, draft press release, management letter or accountants’ certification delivered hereunder, and (b) as of any date of determination, was received by the Bank within the immediately preceding three year period (“Information”), provided, however, that nothing herein shall limit the disclosure of any such Information (i) to its respective Related Parties, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, or requested by any bank regulatory authority, (iii) on a confidential basis, to other parties to the Loan Documents, prospective lenders or their counsel, (iv) to auditors or accountants, and any analogous counterpart thereof, (v) in connection with any litigation to which the Bank is a party, (vi) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Credit Agreement, (B) becomes available to the Bank on a non-confidential basis from a source other than the Borrower, or (C) was available to the Bank on a non-confidential basis prior to its disclosure to the Bank by the Borrower, (vi) on a confidential basis, to service providers for the Bank and its Affiliates, and (vii) to the extent the Borrower shall have consented to such disclosure in writing.

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18.           Article IX of the Credit Agreement is hereby amended by adding a new Section 9.15 as follows:

 

9.15         Acknowledgement Regarding any Supported QFCs

 

To the extent that any Loan Document (i) constitutes a QFC (such Loan Document, a “Loan Document QFC”), or (ii) provides support, through a guarantee or otherwise, for any Loan Document QFC, any Financial Contract or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that such Loan Document and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

 

(a)           In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under such Loan Document that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and such Loan Document were governed by the laws of the United States or a state of the United States.

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(b)            As used in this Section 9.15, the following terms have the following meanings:

 

BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

 

Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

 

19.           Exhibit F to the Credit Agreement is hereby amended and restated in its entirety in the form of Exhibit F hereto.

 

20.           Exhibit I to the Credit Agreement is hereby amended and restated in its entirety in the form of Exhibit I hereto.

 

21.           Paragraphs 1 through 20 of this Amendment shall not be effective until each of the following conditions is satisfied (the date, if any, on which such conditions shall have first been satisfied being referred to herein as the “Amendment Effective Date”):

 

(a)           the Bank shall have received from the Borrower either (i) a counterpart of this Amendment executed on behalf of the Borrower or (ii) written evidence satisfactory to the Bank (which may include telecopy transmission of a signed signature page of this Amendment) that the Borrower has executed a counterpart of this Amendment;

 

(b)           the Bank shall have received a certificate of the Secretary or Assistant Secretary of the Borrower, dated the Amendment Effective Date, in form and substance reasonably satisfactory to the Bank (i) certifying that the Borrower’s Organization Documents have not been amended or modified since December 1, 2017, or if so, attaching a true, correct and complete copy of each amendment or modification thereof, (ii) certifying as to the incumbency of the Borrower’s officer or officers who may sign this Amendment, including therein a signature specimen of such officer or officers, and (iii) attaching true, complete and correct copies of the resolutions duly adopted by the Board approving this Amendment and the transactions contemplated hereby, all of which are in full force and effect on the Amendment Effective Date;

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(c)           the Bank shall have received a favorable written opinion (addressed to the Bank and dated the Amendment Effective Date) from external legal counsel to the Borrower acceptable to the Bank; and

 

(d)           the Bank shall have received such documents and information as the Bank shall have requested in order to comply with “know-your-customer” and other anti-terrorism, anti-money laundering and similar rules and regulations and related policies.

 

18.           The Borrower (a) reaffirms and admits the validity and enforceability of each Loan Document to which it is a party and all of its obligations thereunder and agrees and admits that (i) it has no defense to any such obligation and (ii) it shall not exercise any setoff or offset to any such obligation, and (b) represents and warrants that, after giving effect to the waiver herein contained, (1) as of the date of execution and delivery hereof by the Borrower, no Default has occurred and is continuing and (2) the representations and warranties of the Borrower contained in the Credit Agreement and the other Loan Documents are true on and as of the date hereof with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

 

19.           In all other respects, the Loan Documents shall remain in full force and effect, and no amendment or waiver in respect of any term or condition of any Loan Document shall be deemed to be an amendment or waiver in respect of any other term or condition contained in any Loan Document.

 

20.           This Amendment may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. It shall not be necessary in making proof of this Amendment to produce or account for more than one counterpart signed by the party to be charged.

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21.           Delivery of an executed counterpart of a signature page of this Amendment by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that nothing herein shall require the Bank to accept electronic signatures in any form or format without its prior written consent. Without limiting the generality of the foregoing, the Borrower hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation between the Bank and the Borrower, electronic images of this Amendment or any other Loan Document (in each case, including with respect to any signature pages thereto) shall have the same legal effect, validity and enforceability as any paper original, and (ii) waives any argument, defense or right to contest the validity or enforceability of the Loan Documents based solely on the lack of paper original copies of any Loan Documents, including with respect to any signature pages thereto. For purposes hereof, “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

 

22.           THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

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11 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
     
  By: /s/ P. Bradley Adams

  Name: P. Bradley Adams
  Title: Chief Executive Officer, Principal Financial Officer and Treasurer

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 2 and Waiver No. 1

 

 

  THE BANK OF NOVA SCOTIA
     
  By: /s/ Aron Lau

  Name: Aron Lau

  Title: Director

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 2 and Waiver No. 1

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT F

 

FORM OF COMPLIANCE CERTIFICATE

 

Reference is made to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation, and The Bank of Nova Scotia (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein that are defined in the Credit Agreement shall have the meanings therein defined. This Certificate is being delivered pursuant to Section 6.1(d) of the Credit Agreement.

 

The undersigned, an authorized representative of the Borrower, hereby certifies that as of [fill in the appropriate month-end date]:

 

1.[No Default has occurred and is continuing.][The following Default[s] [has/have] occurred and [is/are] continuing: _____________________].]

 

2.The Adjusted Asset Coverage is set forth below, reasonably detailed calculations of which appear on Schedule A attached hereto:

 

Adjusted Asset Coverage

 

______:1.00

 

3.Senior Debt does not exceed the maximum amount of Senior Debt that would be permitted to be incurred by or for the account of the Borrower under its Fundamental Policies.

 

4.Senior Debt does not exceed the maximum amount of Senior Debt that would be permitted to be incurred by or for the account of the Borrower on the date hereof under the ICA or other applicable law.

 

5.Indebtedness of the Borrower does not exceed the sum of (A) 50% of (x) the Maximum Borrowing Value of the Borrower’s Margin Stock minus (y) all Ordinary Liabilities to the extent not in excess of the amount determined under clause (x) immediately above, plus (B) the excess, if any, of (x) the Maximum Borrowing Value of the Borrower’s Non-Margin Assets over (y) all Ordinary Liabilities to the extent in excess of the amount determined under clause (A)(x) immediately above.

 

6.The Borrower does not have exposure to any Investment other than Permitted Investments.

 

7.The Borrower does not hold any Financial Contract (i) unless (1) the collateral, if any, received or receivable by the Borrower in connection therewith is solely in the form of cash or short-term U.S. treasury securities, and (2) each counterparty thereto or issuer thereof has a minimum senior unsecured unenhanced long term debt rating of at least A- by S&P (or the equivalent rating of another independent rating agency (other than Moody’s) if not so rated by S&P) and at least A3 by Moody’s (or the equivalent rating of another independent rating agency (other than S&P) if not so rated by Moody’s), or (ii) in any case for the purpose of creating or continuing leverage.

 

[the remainder of this page has been intentionally left blank]

 

 

IN WITNESS WHEREOF, I have hereunto set my hand as of [Date].

  

     
  Name:  

  Title:  

 

 

SCHEDULE A

 

Detailed Calculations

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

EXHIBIT I

 

FORM OF COMMITMENT EXTENSION REQUEST

 

[Date]

 

The Bank of Nova Scotia 

40 King Street West 

55th Floor 

Toronto, ON, Canada 

M5H 1H1 

Attn: Aron Lau

 

Reference is hereby made to that certain Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), and The Bank of Nova Scotia (the “Bank”) (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”). Based upon recent discussions between the Borrower and the Bank, the Borrower hereby requests an extension of the Scheduled Commitment Termination Date upon the terms and conditions set forth herein; please indicate your acceptance thereto by executing a copy hereof and returning it to the Borrower.

 

On and after [____________, 20__]:

 

(a)The Scheduled Commitment Termination Date shall be [____________, 20__].

 

(b)The Applicable Margin shall be a rate per annum equal to:

 

(i)with respect to each ABR Loan ____%,

 

(ii)with respect to each Fixed Rate Loan ____%,

 

(iii)with respect to each LIBOR Loan ____%, and

 

(iv)with respect to each Overnight Loan ____%.

 

(c)The Commitment Fee Rate shall be a rate per annum equal to [to be completed].

 

The Borrower hereby certifies to the Bank that:

 

(a)On and as of the date hereof, no Default has occurred and is continuing.

 

(b)On and as of the date hereof, (i) no Default shall have occurred and be continuing, and (ii) the representations and warranties of the Borrower contained in the Loan Documents are true on and as of the date hereof with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

 

 

THIS COMMITMENT EXTENSION REQUEST SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

  

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
   

  By:          

  Name:  

  Title:  

 

ACCEPTED AND AGREED TO:

 

THE BANK OF NOVA SCOTIA, as Bank 

     
By:             

Name:    

Title:    

 

 

Exhibit (b)(1)(iv)

 

EXECUTION COPY

 

AMENDMENT NO. 3 

TO CREDIT AGREEMENT

 

AMENDMENT NO. 3, dated as of October 28, 2021 (this “Amendment”), to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), and The Bank of Nova Scotia (the “Bank”), as amended by Amendment No. 1, dated as of December 1, 2017 (as the same may be further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”).

 

RECITALS

 

I.              Each term that is defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

II.             The Borrower requested an amendment and waiver under the Credit Agreement upon the terms and conditions herein contained, and the Bank has agreed thereto upon the terms and conditions herein contained.

 

AGREEMENTS

 

Accordingly, in consideration of the Recitals and the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Section 1.1 of the Credit Agreement is hereby amended by adding the following defined term thereto in appropriate alphabetical order:

 

Maturity Date” means December 31, 2021.

 

2.             Each of Sections 2.2(b) and 2.5(a) of the Credit Agreement, and the defined term “Interest Payment Date” contained in Section 1.1 of the Credit Agreement, is hereby amended by replacing the phrase “Commitment Termination Date” contained therein with “Maturity Date”.

 

3.            Paragraph 1 of this Amendment shall not be effective until each of the following conditions is satisfied (the date, if any, on which such conditions shall have first been satisfied being referred to herein as the “Amendment Effective Date”):

 

(a)          the Bank shall have received from the Borrower either (i) a counterpart of this Amendment executed on behalf of the Borrower or (ii) written evidence satisfactory to the Bank (which may include telecopy transmission of a signed signature page of this Amendment) that the Borrower has executed a counterpart of this Amendment; and

 

(b)          the Bank shall have received such documents and information as the Bank shall have requested in order to comply with “know-your-customer” and other anti-terrorism, anti-money laundering and similar rules and regulations and related policies.

 

 

4.             The Borrower (a) reaffirms and admits the validity and enforceability of each Loan Document to which it is a party and all of its obligations thereunder and agrees and admits that (i) it has no defense to any such obligation and (ii) it shall not exercise any setoff or offset to any such obligation, and (b) represents and warrants that, after giving effect to the waiver herein contained, (1)  as of the date of execution and delivery hereof by the Borrower, no Default has occurred and is continuing and (2) the representations and warranties of the Borrower contained in the Credit Agreement and the other Loan Documents are true on and as of the date hereof with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

 

5.             In all other respects, the Loan Documents shall remain in full force and effect, and no amendment or waiver in respect of any term or condition of any Loan Document shall be deemed to be an amendment or waiver in respect of any other term or condition contained in any Loan Document.

 

6.             This Amendment may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. It shall not be necessary in making proof of this Amendment to produce or account for more than one counterpart signed by the party to be charged.

 

7.             Delivery of an executed counterpart of a signature page of this Amendment by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that nothing herein shall require the Bank to accept electronic signatures in any form or format without its prior written consent. Without limiting the generality of the foregoing, the Borrower hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation between the Bank and the Borrower, electronic images of this Amendment or any other Loan Document (in each case, including with respect to any signature pages thereto) shall have the same legal effect, validity and enforceability as any paper original, and (ii) waives any argument, defense or right to contest the validity or enforceability of the Loan Documents based solely on the lack of paper original copies of any Loan Documents, including with respect to any signature pages thereto. For purposes hereof, “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

 

8.             THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

[the remainder of this page has been intentionally left blank

2 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
   

  By: /s/ P. Bradley Adams

  Name: P. Bradley Adams
  Title:

Chief Executive Officer, Principal Financial Officer and Treasurer

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 3

 

 

  THE BANK OF NOVA SCOTIA
     
  By: /s/ Aron Lau

  Name: Aron Lau

  Title: Director

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 3

 

 

Exhibit (b)(1)(v) 

 

Execution Version

 

AMENDMENT NO. 4 

TO CREDIT AGREEMENT

 

AMENDMENT NO. 4, dated as of December 29, 2021 (this “Amendment”), to the Credit Agreement, dated as of May 17, 2016, between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Borrower”), and The Bank of Nova Scotia (the “Bank”), as amended by Amendment No. 1, dated as of December 1, 2017, Amendment No. 2 and Waiver No. 1, dated as of October 30, 2020, and Amendment No. 3, dated as of October 28, 2021 (as the same may be further amended, supplemented or otherwise modified from time to time, the “Credit Agreement”).

 

RECITALS

 

I.              Each term that is defined in the Credit Agreement and not herein defined has the meaning ascribed thereto by the Credit Agreement when used herein.

 

II.            The Borrower requested an amendment under the Credit Agreement upon the terms and conditions herein contained, and the Bank has agreed thereto upon the terms and conditions herein contained.

 

AGREEMENTS

 

Accordingly, in consideration of the Recitals and the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Section 1.1 of the Credit Agreement is hereby amended by deleting the defined term “Maturity Date” contained therein.

 

2.             Each of Sections 2.2(b) and 2.5(a) of the Credit Agreement, and the defined term “Interest Payment Date” contained in Section 1.1 of the Credit Agreement, is hereby amended by replacing the phrase “Maturity Date” contained therein with “Commitment Termination Date”.

 

3.             Section 1.1 of the Credit Agreement is hereby amended by inserting the following new defined terms in their appropriate alphabetical order:

 

Amendment No. 4” means Amendment No. 4, dated as of December 29, 2021, to this Credit Agreement.

 

Rule 18f-4” means rule 18f-4 under the ICA.

 

4.             Each of the following defined terms contained in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

Security Documents” means the Security Agreement, Amendment No. 4, the Control Agreement and each other agreement, instrument or other document executed or delivered pursuant thereto.

 

 

5.             The defined term “Interest Period” contained in Section 1.1 of the Credit Agreement is hereby amended by deleting the phrase “two,” contained therein.

 

6.             The defined term “Scheduled Commitment Termination Date” contained in Section 1.1  of the Credit Agreement is hereby amended by replacing the date “October 28, 2021” with the date “December 28, 2022”.

 

7.             Section 4.5 of the Credit Agreement is hereby amended by replacing the phrase “(other than the filing of each financing statement in the form attached to the Security Agreement in the office indicated on such financing statement)” with the phrase “(other than the filing of the financing statement in the form attached to Amendment No. 4 in the office indicated on such financing statement)”.

 

8.             Section 4.16(a) of the Credit Agreement is hereby amended by replacing the phrase “and (ix)” with the phrase “(ix) it is not in violation of Rule 18f-4, and (x)”.

 

9.             Section 8.1(q) of the Credit Agreement is hereby amended and restated in its entirety, as follows:

 

(q)          except as a result of any sale or other transfer of any asset in accordance with the terms of the Loan Documents, any Lien purported to be created under Amendment No. 4 shall cease to be, or shall be asserted by the Borrower not to be, a valid and perfected Lien on any Collateral (as defined in the Security Agreement), with the priority required by the applicable Security Document; or

 

10.          Section 9.1(b) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(b)          if to the Bank, to it at, (i) in all cases, 250 Vesey Street, 23rd Floor, New York, NY, 10281, Attention: Aron Lau (Telephone: (212) 225-5952; E-Mail address: aron.lau@scotiabank.com), and (ii) in the case of all notices and other communications pursuant to Article 2, with a copy to 720 King Street West, 4th Floor, Toronto, ON Canada M5V 2T3, Attention: Corporate Loan Team (Telephone: (212) 225-5705; Facsimile: (212) 225-5709; E-Mail address: CorporateLending.LoanOps@scotiabank.com).

 

11.          Each of the addresses appearing in Exhibits C-1 and C-2 of the Credit Agreement are hereby amended and restated as follows:

 

The Bank of Nova Scotia 

250 Vesey Street, 23rd Floor 

New York, NY, 10281 

Attn: Aron Lau 

2

 

12.           Paragraphs 1 through 11 of this Amendment shall not be effective until each of the following conditions is satisfied (the date, if any, on which such conditions shall have first been satisfied being referred to herein as the “Amendment Effective Date”):

 

(a)           the Bank shall have received from the Borrower either (i) a counterpart of this Amendment executed on behalf of the Borrower or (ii) written evidence satisfactory to the Bank (which may include telecopy transmission of a signed signature page of this Amendment) that the Borrower has executed a counterpart of this Amendment;

 

(b)           the Bank shall have received a certificate of the Secretary or Assistant Secretary of the Borrower, dated the Amendment Effective Date, in form and substance reasonably satisfactory to the Bank (i) certifying that the Borrower’s Organization Documents have not been amended or modified since October 30, 2020, or if so, attaching a true, correct and complete copy of each amendment or modification thereof, (ii) certifying as to the incumbency of the Borrower’s officer or officers who may sign this Amendment, including therein a signature specimen of such officer or officers, and (iii) attaching true, complete and correct copies of the resolutions duly adopted by the Board approving this Amendment and the transactions contemplated hereby, all of which are in full force and effect on the Amendment Effective Date;

 

(c)           the Bank shall have received a favorable written opinion (addressed to the Bank and dated the Amendment Effective Date) from external legal counsel to the Borrower acceptable to the Bank;

 

(d)           the Bank shall have received a copy of a new Federal Reserve Form, duly executed and delivered by or on behalf of the Borrower, in form and substance acceptable to the Bank;

 

(e)           the Bank shall have received Uniform Commercial Code lien search reports disclosing that there are no Liens (other than the Bank’s) of record in the applicable public office covering the Borrower or any asset or property thereof;

 

(f)            the Bank shall have received from the Borrower and the Custodian a reaffirmation of the Control Agreement, in form and substance acceptable to the Bank; and

 

(g)           the Bank shall have received such documents and information as the Bank shall have requested in order to comply with “know-your-customer” and other anti-terrorism, anti-money laundering and similar rules and regulations and related policies.

 

13.           Capitalized terms used in Paragraphs 13, 14 and 15, to the extent not defined herein or in the Credit Agreement, have the meaning set forth in the Security Agreement. To secure the payment and performance of the Obligations when due, the Borrower hereby grants to the Bank a Security Interest in and to all of the Borrower’s right, title and interest in and to the following (with respect to the items listed in clauses (ii) and (iii) below, only to the extent such items would not constitute Excluded Collateral): (i) the Custody Account and the Custody Assets, (ii) all Accounts, cash, cash equivalents, Chattel Paper, Deposit Accounts, Financial Assets, Financial Contracts, General Intangibles, Instruments, Investment Property, and Money, (iii) all Supporting Obligations in respect of all of the foregoing, and (iv) all Records in respect of all of the foregoing, in each case, whether now owned or existing or hereafter arising or acquired, together with all of the Proceeds (which shall include all dividends, distributions, accessions and income on and in respect of all of the foregoing and all other rights and benefits in respect thereof) of all of the foregoing. To perfect the security interest granted pursuant to this paragraph, the Borrower hereby authorizes the Bank to file in the appropriate filing office and at the expense of the Borrower a financing statement in the form attached hereto as Annex A (the “UCC Financing Statement”).

3

 

14.           The Borrower represents and warrants to the Bank that (i) this Amendment creates an enforceable Security Interest in the Collateral in favor of the Bank, (ii) there are no Liens upon the Collateral other than Permitted Liens, and (iii)(1) with respect to the Collateral constituting the Custody Account and the Custody Assets, the Bank has a perfected Security Interest in such Collateral, which Security Interest is, other than with respect to the Liens permitted by Section 7.2(e) of the Credit Agreement, prior to all other Liens, and (2) with respect to all other Collateral in which a Security Interest may be perfected by filing a financing statement, assuming the presentation for filing of the UCC Financing Statement, at the governmental office listed thereon together with the appropriate filing fees therefor on the date hereof, the Bank has a perfected Security Interest in such Collateral, which Security Interest is prior to all Liens other than the Liens permitted by Section 7.2(f) of the Credit Agreement.

 

15.           The Borrower agrees that it shall (i) at all times (1) with respect to the Collateral constituting the Custody Account and the Custody Assets, cause the Bank to have a perfected Security Interest in such Collateral, which Security Interest shall be, other than with respect to the Liens permitted by Section 7.2(e) of the Credit Agreement, prior to all other Liens, and (2) with respect to all other Collateral in which a Security Interest may be perfected by filing a financing statement, cause the Bank to have a perfected Security Interest in such Collateral, which Security Interest shall be prior to all Liens other than the Liens permitted by Section 7.2(f) of the Credit Agreement, and (ii) not cause or permit any of the Collateral (1) to be subject to any Lien other than Permitted Liens, or (2) to be subject to any Lien (other than Permitted Charges) that has any priority over the Security Interest granted hereby.

 

16.           The Borrower (a) reaffirms and admits the validity and enforceability of each Loan Document to which it is a party and all of its obligations thereunder and agrees and admits that (i) it has no defense to any such obligation and (ii) it shall not exercise any setoff or offset to any such obligation, and (b) represents and warrants that, (1) as of the date of execution and delivery hereof by the Borrower, no Default has occurred and is continuing and (2) the representations and warranties of the Borrower contained in the Credit Agreement and the other Loan Documents are true on and as of the date hereof with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

 

17.           In all other respects, the Loan Documents shall remain in full force and effect, and no amendment in respect of any term or condition of any Loan Document shall be deemed to be an amendment in respect of any other term or condition contained in any Loan Document.

4

 

18.           This Amendment may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. It shall not be necessary in making proof of this Amendment to produce or account for more than one counterpart signed by the party to be charged.

 

19.           Delivery of an executed counterpart of a signature page of this Amendment by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that nothing herein shall require the Bank to accept electronic signatures in any form or format without its prior written consent. Without limiting the generality of the foregoing, the Borrower hereby (i) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation between the Bank and the Borrower, electronic images of this Amendment or any other Loan Document (in each case, including with respect to any signature pages thereto) shall have the same legal effect, validity and enforceability as any paper original, and (ii) waives any argument, defense or right to contest the validity or enforceability of the Loan Documents based solely on the lack of paper original copies of any Loan Documents, including with respect to any signature pages thereto. For purposes hereof, “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

 

20.           THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

[the remainder of this page has been intentionally left blank]

5

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

  TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.
     
  By: /s/ P. Bradley Adams

  Name: P. Bradley Adams
  Title: Chief Executive Officer

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 4

 

 

THE BANK OF NOVA SCOTIA
     
  By: /s/ Aron Lau

  Name: Aron Lau

  Title: Director

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 4

 

 

ANNEX A

 

Tortoise Power and Energy Infrastructure Fund, Inc. (TPZ) - Amendment No. 4

 

 

 

 

UCC FINANCING STATEMENT 

FOLLOW INSTRUCTIONS 

 A. NAME & PHONE OF CONTACT AT FILER (optional)      
         
 B. E-MAIL CONTACT AT FILER (optional)      
         
 C. SEND ACKNOWLEDGMENT TO:    (Name and Address)      
         
    Bryan Cave Leighton Paisner LLP      
    1290 Avenue of the Americas      
    New York, New York 10104      
    Attn: Kathryn Allyn    
           
          THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

1.DEBTOR’S NAME: Provide only one Debtor name (1a or 1b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor’s name); if any part of the Individual Debtor’s name will not fit in line 1b, leave all of item 1 blank, check here ☐ and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad)

 

OR 

 1a. ORGANIZATION’S NAME 

Tortoise Power and Energy Infrastructure Fund, Inc. 

 1b. INDIVIDUAL’S SURNAME  FIRST PERSONAL NAME  ADDITIONAL NAME(S)/INITIAL(S)  SUFFIX
           
1c. MAILING ADDRESS  CITY  STATE  POSTAL CODE  COUNTRY
11550 ASH STREET, SUITE 300 LEAWOOD  KS  66211  USA

2.DEBTOR’S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor’s name); if any part of the Individual Debtor’s name will not fit in line 2b, leave all of item 2 blank, check here ☐ and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad)

OR

2a. ORGANIZATION’S NAME

 

2b. INDIVIDUAL’S SURNAME

 

FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
           
3.SECURED PARTY’S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY): Provide only one Secured Party name (3a or 3b)

OR 

3a. ORGANIZATION’S NAME 

THE BANK OF NOVA SCOTIA 

       

3b. INDIVIDUAL’S SURNAME

 

FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX
3c.

MAILING ADDRESS 

CITY STATE POSTAL CODE COUNTRY
250 VESEY STREET, 23RD FLOOR NEW YORK NY 10281 USA

4. COLLATERAL: This financing statement covers the following collateral:

 

 

 

ALL ASSETS.

  

 

 

 

 

 

5. Check only if applicable and check only one box: Collateral is ☐ held in a Trust (see UCC1Ad, item 17 and Instructions) ☐ being administered by a Decedent’s Personal Representative 

6a. Check only if applicable and check only one box:   6b. Check only if applicable and check only one box:
   Public-Finance Transaction          ☐ Manufactured-Home Transaction        ☐ A Debtor is a Transmitting Utility      Agricultural Lien           ☐ Non-UCC Filing
7. ALTERNATIVE DESIGNATION (if applicable):        ☐ Lessee/Lessor          ☐ Consignee/Consignor        ☐  Seller/Buyer          ☐ Bailee/Bailor      ☐ Licensee/Licensor

8. OPTIONAL FILER REFERENCE DATA: 

  Filed with the State Department of Assessments and Taxation of Maryland 

1040546.000186

International Association of Commercial Administrators (IACA)

FILING OFFICE COPY — UCC FINANCING STATEMENT (Form UCC1) (Rev. 04/20/11)

 

 

Exhibit (d)(1)

 

 (GRAPHIC)

 

Depositary and Information Agent Agreement

 

Between

 

Tortoise Power and Energy Infrastructure Fund, Inc.,

 

And

 

Computershare Trust Company, N.A., Computershare Inc.

 

And

 

Georgeson LLC

Page 1 

 

 

THIS DEPOSITARY AND INFORMATION AGENT AGREEMENT dated as of August 31, 2022 (the “Effective Date”), is by and between Tortoise Power and Energy Infrastructure Fund, Inc., a Maryland corporation (the “Purchaser”), having its principal office and place of business at 6363 College Boulevard, Overland Park Kansas 66211, and Computershare Inc., a Delaware corporation (“Computershare”), and its wholly owned subsidiary Computershare Trust Company, N.A., a federally chartered trust company (“Trust Company”, and together with Computershare, “Agent”), each having a principal office and place of business at 150 Royall Street, Canton, Massachusetts 02021, and, for purposes of the services provided under Article II hereof, Georgeson LLC, a Delaware limited liability company (”Georgeson”).

 

ARTICLE I – DEPOSITARY SERVICES

 

1.       APPOINTMENT

 

1.1           The Purchaser is offering to purchase up to 5% of the its outstanding shares of Common Stock, $ 0.001 per share par value (the “Shares”), at 98% of pricing date NAV to the seller in cash, upon the terms and conditions set forth in its Offer to Purchase dated October 3rd, 2022 (the “Offer to Purchase”) and in the letter of transmittal in a form acceptable to Agent (the “Letter of Transmittal”), which together, as they may be amended from time to time, constitute the “Offer”. Each Purchaser hereby appoints Agent to act as depositary and information agent in connection with the Offer and Agent hereby accepts such appointment in accordance with and subject to the terms and conditions set forth in this Agreement.

 

1.2           The “Expiration Date” for the Offer shall be 5:00 p.m. New York time, on October 31st, 2022, unless and until a Purchaser shall have extended the period of time for which the Offer is open, in which event the term “Expiration Date” shall mean the latest time and date at which the Offer, as so extended by such Purchaser from time to time, shall expire. Capitalized terms used but not defined herein shall have the same meanings as in the Offer.

 

1.3           Promptly after the date hereof, the Purchasers will furnish Agent as depository, with a certified list, in a format acceptable to Agent, of holders of the Shares of record at the date noted above on which the Offer to Purchase becomes effective (the “Effective Time”), including each such holder’s name, address, taxpayer identification number (“TIN”), Share amount with applicable tax lot detail, any certificate detail or indication of accounts holding the Shares through the Direct Registration System (“Book Entry Shares”) and information regarding any applicable account stops or blocks (the “Record Stockholders List”).

 

1.4           No later than the earlier of (i) forty-five (45) days after the Expiration Date or (ii) January 15 of the year following the year in which the Expiration Date occurs, the Purchase shall deliver  to Agent as depository written direction on the adjustment of cost basis for covered securities that arise from or are affected by this Offer in accordance with current Internal Revenue Service regulations and as set forth in the Tax Instruction/Cost Basis Information Letter attached hereto as Exhibit A.

 

2.       TENDER OF SHARES

 

Agent, in its capacity as depositary, will receive tenders of the Shares. Subject to the terms and conditions of this Agreement, Agent is authorized to accept such tenders of the Shares in accordance with the Offer, and to act in accordance with the following instructions:

 

2.1           The Shares shall be considered validly tendered to Agent only if:

 

(a)Agent receives prior to the Expiration Date, (i) certificates for such Shares (or a Confirmation (as defined in paragraph (b) below) relating to such Shares), if applicable, (ii) a properly completed and duly executed Letter of Transmittal or an Agent’s Message (as defined in paragraph (b) below) relating thereto, and (iii) if applicable, a final determination by Purchaser of the adequacy of the items received, in accordance with Article I, Section 8 hereof; or

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(b)Agent receives (i) a Notice of Guaranteed Delivery (as defined in Article I, Section 2.2(b) below) relating to such Shares prior to the Expiration Date, (ii) certificates for such Shares (or a Confirmation relating to such Shares), if applicable, and either a properly completed and duly executed Letter of Transmittal or an Agent’s Message relating thereto, prior to the end of the [third] trading day on the New York Stock Exchange after the Expiration Date, and (iii) if applicable, a final determination by the Purchaser of the adequacy of the items received, in accordance with Article I, Section 8 hereof.

 

2.2           For the purpose of this Agreement:

 

(a)a “Confirmation” shall be a confirmation of book-entry transfer of the Shares into an Agent account at The Depository Trust Company (the “Book-Entry Transfer Facility”) to be established and maintained by Agent in accordance with Article I, Section 3 hereof;

 

(b)a “Notice of Guaranteed Delivery” shall be a notice of guaranteed delivery in the form agreed upon by the parties hereto or, if sent by a Book-Entry Transfer Facility, a message transmitted through electronic means in accordance with the usual procedures of such Book-Entry Transfer Facility and Agent; provided, however, that if such notice is sent by a Book-Entry Transfer Facility through electronic means, it must state that such Book-Entry Transfer Facility has received an express acknowledgment from the participant on whose behalf such notice is given that such participant has received and agrees to be bound by the form of such notice; and an “Agent's Message” shall be a message transmitted through electronic means by a Book-Entry Transfer Facility, in accordance with the normal procedures of such Book-Entry Transfer Facility and Agent, to and received by Agent and forming part of a Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares which are the subject of such Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal, and that the Purchaser may enforce such agreement against such participant. The term Agent's Message shall also include any hard copy printout evidencing such message generated by a computer terminal maintained at Agent's office.

 

(c)The Purchaser acknowledges that in connection with the Offer Agent may enter into agreements or arrangements with a Book-Entry Transfer Facility which, among other things, provide that (i) delivery of an Agent's Message will satisfy the terms of the Offer with respect to the Letter of Transmittal, (ii) such agreements or arrangements are enforceable against the Purchaser by such Book-Entry Transfer Facility or participants therein and (iii) Agent, as depositary, is authorized to enter into such agreements or arrangements on behalf of the Purchaser. Without limiting any other provision of this Agreement, Agent is expressly authorized to enter into any such agreements or arrangements on behalf of the Purchaser and to make any necessary representations or warranties in connection thereunder, and any such agreement or arrangement shall be enforceable against the Purchaser.

 

(d)If any holder of the Shares as of the Effective Time reports to Agent that his or her failure to surrender a certificate representing any Shares registered in his or her name at the Effective Time according to the Record Noteholders List is due to the theft, loss or destruction of such certificate, upon Agent’s receipt from such stockholder of (a) an affidavit of such theft, loss or destruction, (b) an open penalty surety bond in form and substance satisfactory to Agent, and (c) payment of all applicable fees, Agent will make and payment due in connection with the Offer to the former noteholder as though the certificate for the Shares had been surrendered. Agent may charge holders an administrative fee for processing payment with respect to the Shares represented by lost certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates in a single account. Agent may receive compensation, including in the form of commissions for services provided in connection with surety programs offered to stockholders.

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3.       BOOK-ENTRY ACCOUNT

 

Agent shall take steps to establish and, subject to such establishment, maintain an account at each Book-Entry Transfer Facility for book-entry transfers of the Shares, as set forth in the Letter of Transmittal.

 

4.        PROCEDURE FOR DISCREPANCIES

 

Agent shall follow its regular procedures to attempt to reconcile any discrepancies between the number of Shares that any Letter of Transmittal may indicate are owned by a tendering stockholder and the number that the Record Stockholders List indicates such stockholder owned. In any instance where Agent cannot reconcile such discrepancies by following such procedures, Agent will consult with the Purchaser for instructions as to the number of Shares, if any; Agent is authorized to accept as validly tendered. In the absence of such instructions, Agent is authorized not to accept any such Shares and will return to the tendering stockholder (at Agent’s option by either first class mail under a blanket surety bond or insurance protecting Agent, the Purchaser from losses or liabilities arising out of the non-receipt or non-delivery of such Shares or by registered mail insured separately for the value of such Shares) to such stockholder’s address as set forth in the Letter of Transmittal any such Shares, the related Letters of Transmittal and any other documents received with such Shares.

 

5.       PROCEDURE FOR DEFICIENT ITEMS

 

5.1           Agent shall examine any certificate representing the Shares, Letter of Transmittal, Notice of Guaranteed Delivery, Agent’s Message and any other document required by the Letter of Transmittal that is received by Agent as depositary to determine whether any tender may be defective. In the event Agent concludes that any Letter of Transmittal, Notice of Guaranteed Delivery, Agent’s Message or other document has been improperly completed, executed or transmitted, any certificate representing the Shares is not in proper form for transfer or some other irregularity in connection with the tender of the Shares exists, Agent is authorized, subject to 8.2 below, to advise the tendering stockholder or transmitting Book-Entry Transfer Facility, as the case may be, of the existence of the irregularity. Agent is not authorized to accept any tender that is not made in accordance with the terms and conditions set forth in the Offer, or any other tender which Agent deems to be defective, unless Agent shall have received from the Purchaser the applicable Letter of Transmittal (or if the tender was made by means of a Confirmation containing an Agent’s Message, a written notice), duly dated and signed by an authorized officer of the Purchaser, indicating that any defect or irregularity in such tender has been cured or waived and that such tender has been accepted by the Purchaser.

 

5.2           Promptly upon concluding that any tender is defective, Agent shall use reasonable efforts in accordance with Agent’s regular procedures to notify the person tendering such Shares, or Book-Entry Transfer Facility transmitting the Agent's Message, as the case may be, of such determination and, when necessary, return the subject Shares to such person in the manner described in Article I, Section 8 hereof. The Purchaser shall have full discretion to determine whether any tender is complete and proper and shall have the absolute right to reject any or all tenders of any Shares determined by it not to be in proper form and to determine whether the acceptance of or payment for such tenders may, in the opinion of counsel for the Purchaser, be unlawful; it being specifically agreed that Agent shall have neither discretion nor responsibility with respect to these determinations. To the extent permitted by applicable law, the Purchaser also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in the tender of any Shares. The interpretation by the Purchaser of the terms and conditions of the Offer to Purchase, the Letter of Transmittal and the instructions thereto, a Notice of Guaranteed Delivery or an Agent's Message (including without limitation the determination of whether any tender is complete and proper) shall be final and binding.

Page 4 

 

 

5.3           If less than all of the Shares validly tendered pursuant to the Offer are to be accepted because the Offer is oversubscribed by the Expiration Date, the Purchaser shall provide Agent with instructions regarding proration as soon as practicable. Agent shall maintain accurate records as to all the Shares tendered prior to or on the Expiration Date.

 

6.       REPORT OF TENDER ACTIVITY

 

6.1. Agent shall forward up to 10 reports of tender activity, by email, beginning 2 weeks prior to the initial expiration date, to each of the parties named below as to the following information, based upon a preliminary review as of the close of business on the preceding business day:  (i) the number of the Shares tendered; (ii) the number of the Shares tendered represented by certificates physically held by Agent; (iii) the number of the Shares represented by Notices of Guaranteed Delivery; (iv) the number of the Shares withdrawn; and (v) the cumulative totals of the Shares in categories (i) through (iv) above. At the expiration of the offer Agent shall provide a master list of the Shares elected, including a complete list of the electing stockholders.

 

6.2. Agent may furnish to the Purchaser, upon reasonable request, ad hoc reports. Fees for such reports will be as set forth on the Schedule of Fees attached hereto as Exhibit B. At the expiration of the Offer, Agent shall provide a master list of the Shares tendered, including a complete list of the tendering stockholders.

 

7.       NOTICE OF WITHDRAWAL

 

Agent will return to any person tendering the Shares, in the manner described in Article I, Section 8 hereof, any Shares tendered by such person but duly withdrawn pursuant to the Offer to Purchase. To be effective, Agent must receive a written notice of withdrawal at its address as set forth on the back page of the Offer to Purchase, within the time period specified for withdrawal in the Offer to Purchase or other method mutually agreed to by the Purchaser and Agent. Any notice of withdrawal must specify the name of the registered holder of the Shares to be withdrawn, the number of the Shares to be withdrawn and, if such Shares are represented by a physical certificate, the number of such certificate. Agent is authorized and directed to examine any notice of withdrawal to determine whether it believes any such notice may be defective. In the event Agent concludes that any such notice is defective it shall, after consultation with and on the instructions of the Purchaser, use reasonable efforts in accordance with its regular procedures to notify the person delivering such notice of such determination. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser in its sole discretion, whose determination shall be final and binding. Any Shares withdrawn in accordance with the procedures set forth in this section shall no longer be considered to be properly tendered unless such Shares are re-tendered prior to the Expiration Date in accordance with Article I, Section 2 hereof.

 

8.    RETURN OF SHARES   

 

If, pursuant to the terms and conditions of the Offer, the Purchaser has notified Agent that it does not accept certain of the Shares tendered or purported to be tendered or a stockholder has withdrawn any tendered Shares, the Purchaser instructs the Agent to promptly return tendered Certificated Shares, by canceling all such Certificated Shares and issuing an equal number of book-entry Shares in Direct Registration System to each tendering holder and mail a transaction advice reflecting such to each holder, together with any other documents received, to the person who deposited the same. Any transaction advice for such Shares and other documents shall be delivered by Agent, at its option, by: 

 

a)first class mail under a blanket surety bond or insurance protecting Agent, the Purchaser from losses or liabilities arising out of the non-receipt or non-delivery of such Shares; or

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b)registered mail insured separately for the value of such Shares.  If any such Shares were tendered or purported to be tendered by means of a Confirmation containing an Agent's Message, Agent shall notify the Book-Entry Transfer Facility that transmitted such Confirmation of the Purchaser’s decision not to accept the Shares.

 

9.        AMENDMENT/EXTENSION OF OFFER

 

Any amendment to or extension of the Offer, as the Purchaser shall from time to time determine, shall be effective upon notice to Agent from the Purchaser given prior to the time the Offer would otherwise have expired, and shall be promptly confirmed by the Purchaser in writing; provided that Agent may rely on and shall be authorized and protected in acting or failing to act upon any such notice even if such notice is not confirmed in writing or such confirmation conflicts with such notice. If at any time the Offer shall be terminated as permitted by the terms thereof, the Purchaser shall promptly notify Agent of such termination. For purpose of this Agreement, an extension or subsequent offer period (an “Extension”) shall last up to 10 business days. Any Extension period exceeding 10 business days will incur additional fees commensurate with that extension or extensions.

 

10.     DISTRIBUTION OF ENTITLEMENTS

 

10.1         If, under the terms and conditions set forth in the Offer to Purchase, the Purchaser becomes obligated to accept and pay for the Shares validly tendered, the Purchaser shall:

 

a)Provide Agent with a Notice of Acceptance in a form mutually agreed to by Agent and the Purchaser

 

b)Provide Agent with instructions to coordinate the transfer of the Shares purchased in a form mutually agreed to by Agent and the Purchaser (the “Transfer of Shares”)

 

c)Deposit with Agent sufficient federal or other immediately available funds to pay, subject to the terms and conditions of the Offer, all stockholders for whom payment for the Shares are to be drawn, less any adjustments required by the terms of the Offer and all applicable tax withholdings (“Tender Consideration”),

 

10.2         Upon the Transfer of the Shares and deposit of immediately available funds, Agent shall deliver or cause to be delivered to stockholders who have validly tendered their Shares (or such holders’ designated payees), consistent with this Agreement and the Letter of Transmittal, official bank checks, or other method as mutually agreed between Agent and the Purchaser, in the amount of the applicable purchase price specified in the Offer (less any applicable tax withholding) for the Shares theretofore properly tendered and purchased under the terms and conditions of the Offer (the “Payment Event”). Tender Consideration must be received by Agent prior to 9:00 a.m. New York City time for Payment Event to commence on the same day that Tender Consideration is received by Agent. Agent will not be obligated to calculate or pay interest to any holder or any other party claiming through a holder or otherwise.

 

ARTICLE II – Information Agent Services

 

Information Agent Services

 

1.Services. Georgeson shall perform the information agent services described in the attached Exhibit B (such services, collectively, the “IA Services”).

 

2.Fees. In consideration of Georgeson’s performance of the IA Services, the Purchaser shall pay Georgeson the amounts, and pursuant to the terms, set forth on the attached Exhibit B, together with the Expenses (as defined below). The Purchaser acknowledges and agrees that the Schedule of Fees shall be subject to adjustment if the Purchaser requests Georgeson to provide services with respect to additional matters or a revised scope of work.

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3.Expenses. In addition to the fees and charges described in paragraphs (2) hereof, Georgeson shall charge the Purchaser, and the Purchaser shall be solely responsible, for the following costs and expenses (collectively, the “Expenses”):

 

a.Costs and expenses incidental to the Offer, including without limitation the mailing or delivery of Offer materials;

 

b.Costs and expenses relating to Georgeson’s work with its agents or other parties involved in the Offer, including without limitation charges for bank threshold lists, data processing, telephone directory assistance, facsimile transmissions or other forms of electronic communication;

 

c.Costs and expenses incurred by Georgeson at the Purchaser’s request or for the Purchaser’s convenience, including without limitation for copying, printing of additional and/or supplemental material and travel by Georgeson’s personnel; and

 

d.Any other costs and expenses authorized by the Purchaser during the course of the Offer, including without limitation those relating to advertising (including production and posting), media relations and analytical services.

 

e.The Purchaser shall pay all applicable taxes incurred in connection with the delivery of the IA Services or Expenses.

 

4.    Custodial Charges.

 

Georgeson agrees to check, itemize and pay on the Purchaser’s behalf the charges of brokers and banks, with the exception of Broadridge Financial Solutions, Inc. (which will bill the Purchaser directly), for forwarding the Purchaser’s offering material to beneficial owners. The Purchaser shall reimburse Georgeson for such broker and bank charges in the manner described in the Fees & Services Schedule.

 

ARTICLE III – GENERAL PROVISIONS

 

1.       PROCEDURE FOR DISCREPANCIES

 

Agent shall follow its regular procedures to attempt to reconcile any discrepancies between the number of certificated Shares that any Letter of Transmittal may indicate are owned by a surrendering stockholder and the number that the Record Stockholders List indicates such stockholder owned of record as of the Effective Time. In any instance where Agent cannot reconcile such discrepancies by following such procedures, Agent will consult with the Purchaser for instructions as to the number of certificated Shares, if any; Agent is authorized to accept for exchange. In the absence of such instructions, Agent is authorized not to accept any such certificated Shares for exchange and will return to the surrendering stockholder in accordance with its standard procedures to such stockholder’s address as set forth in the Letter of Transmittal any certificates for the Shares surrendered in connection therewith, the related Letters of Transmittal and any other documents received with such Shares.

 

2.       PROCEDURE FOR DEFICIENT ITEMS

 

2.1          Agent shall examine the Letter of Transmittal and certificates for the Shares received by it as agent to ascertain whether they appear to have been completed and executed in accordance with the instructions set forth in the Letter of Transmittal. In the event Agent determines that any Letter of Transmittal does not appear to have been properly completed or executed, or where the certificates representing the Shares do not appear to be in proper form for surrender, or any other deficiency in connection with the surrender appears to exist, the Purchaser authorizes and instructs Agent to follow, where possible, its regular procedures, set forth in Article III, Section 2.3 below, to attempt to cause such irregularity to be corrected. Agent is not authorized to waive any deficiency in connection with the surrender, unless the Purchaser provides written authorization to waive such deficiency, subject to applicable law and regulations.

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2.2           If a Letter of Transmittal specifies that payment for the Shares is to be made to a person other than the person in whose name a surrendered certificate is registered, Agent will issue no Tender Consideration until such Letter of Transmittal has been properly endorsed with a signature guarantee from an eligible guarantor institution approve by the Securities Transfer Association, and accompanied by any other evidence of authority that may be reasonably required by the Agent, and otherwise put in proper form for transfer.

 

2.3           If any such deficiency with respect to any certificated Shares is neither corrected nor waived, Agent shall: (a) convert the Shares represented by such certificate to a Book Entry position and (b) Send to such holder a defect letter describing the applicable defects and asking that the deficiencies be corrected.

 

3.       ELIGIBILITY OF SHARES FOR PAYMENT

 

Agent requests specific information with respect to affiliates, Shares ineligible for tender, and any stockholder plans affected by this Offer   including any treasury positions. Purchaser agrees to provide all such applicable information on the list of affiliates, ineligible Shares and plans attached hereto as Exhibit C, as requested.

 

4.       DEPOSIT OF FUNDS

 

4.1           All funds received by Computershare pursuant to this Agreement that are to be distributed or applied by Computershare in accordance with the terms of this Agreement (the “Funds”) shall be delivered to Computershare by 9:00 a.m. Eastern Time (“ET”) and in no event later than 12:00 p.m. ET on the Effective Time. Funding after 9:00 a.m. but before 12:00 p.m. on the Effective Time may cause delays in payments to be made on the Effective Time. Delivery of the Funds on any day after 12:00 p.m. ET will be subject to the terms of Article III, Section 4.4, below. Once received by Computershare, the Funds shall be held by Computershare as agent for the Purchaser . Until paid or distributed in accordance with this Agreement, the Funds shall be deposited in one or more bank accounts to be maintained by Computershare in its name as agent for the Purchaser. Until paid pursuant to this Agreement, Computershare may hold or invest the Funds through such accounts in: (i) bank accounts, short term certificates of deposit, bank repurchase agreements, and disbursement accounts with commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.), (ii) cash management sweeps to AAA fixed NAV money market funds that comply with Rule 2a-7 of the Investment Company Act of 1940, (iii) funds backed by obligations of, or guaranteed by, the United States of America, municipal securities, or (iv) debt or commercial paper obligations rated A-1 or P-1 or better by S&P Global Inc. (“S&P”) or Moody's Investors Service, Inc. (“Moody’s”), respectively.

 

4.2           Computershare will only draw upon the Funds in such account(s) as required from time to time in order to make the payments for the Shares and any applicable tax withholding payments. Computershare shall have no responsibility or liability for any diminution of the Funds that may result from any deposit or investment made by Computershare in accordance with this Article III, Section 4, including any losses resulting from a default by any bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings in connection with such deposits. Computershare shall not be obligated to pay such interest, dividends or earnings to the Purchaser, any holder or any other party.

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4.3           Computershare is acting as Agent hereunder and is not a debtor of the Purchaser in respect of the Funds.

 

4.4          In the case of late-day funding, which means delivery of the Funds to Computershare after 12:00 p.m. ET on any day, regardless of whether such funding occurs prior to, or after, the Effective Time as set forth in Article III, Section 4.1 above (“Late-Day Funding”), Federal Deposit Insurance or other bank liquidity charges may apply in connection with the overnight deposit of the Funds with commercial banks. The parties hereto agree that any such charges assessed as a result of Late-Day Funding will be charged to the Purchaser and the Purchaser hereby agrees to pay such charges.

 

4.5           The Purchaser agrees to deliver the Funds by wire to the account(s) listed on the attached Exhibit D, which may be amended in writing from time to time.

 

5.      International Currency Exchange

 

Computershare at its option may offer its International Currency Exchange (“ICE”) Service (the “Service”) to certain shareholders whereby any such shareholder can elect to receive their payment in a currency other than U.S. Dollars, via a convenient and secure currency conversion service. The Service is voluntary and will only be utilized at the direction of the eligible shareholder electing such Service and agreeing to the terms and condition of the Service as described in the ICE Registration Form included with a Letter of Transmittal and sent to eligible shareholders. Agent shall charge a fee to participants for processing. The Purchaser will not incur fees resulting from the Service.

 

6.      DATE/TIME STAMP

 

Each document received by Agent relating to its duties hereunder shall be dated and time stamped when received.

 

8.      TAX REPORTING

 

78.1         Agent shall prepare and file with the appropriate governmental agency and mail to each stockholder, as applicable, all appropriate tax information forms, including but not limited to Forms 1099-B, covering payments or any other distributions made by Agent pursuant to this Agreement during each calendar year, or any portion thereof, during which Agent performs services hereunder, as described in the Tax Instruction /Cost Basis Information Letter attached hereto as Exhibit A. Any cost basis or tax adjustments required after the Effective Time will incur additional fees.

 

8.2           With respect to any surrendering stockholder whose TIN has not been certified as correct, Agent shall deduct and withhold the appropriate backup withholding tax from any payment made to such stockholder pursuant to the Internal Revenue Code.

 

8.3           Should any issue arise regarding federal income tax reporting or withholding, Agent shall take such reasonable action as the Purchaser may reasonably request in writing. Such action may be subject to additional fees.

 

9. UNCLAIMED PROPERTY The Agent shall report unclaimed property to each state in compliance with state laws.  The Agent will charge the Purchaser its standard fees plus expenses (including the cost of due diligence mailings) for such services. The Purchaser acknowledges and agrees that in the case of reports made and property delivered pursuant to an initial or voluntary compliance program administered by private auditing agents retained by state unclaimed property administrators, the Agent will be compensated for its efforts in facilitating the Purchaser’s involvement in such a program including the provision of the necessary records and remittance of property in the manner required by the program by means of an expense reimbursement payment based on a percentage of the property remitted to the states through participation in the program. The Purchaser will not be charged for any services performed by the Agent in conjunction with the program to the extent that the Agent receives an expense reimbursement and agrees to reimburse Agent for any expenses incurred in the performance of such services.

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10.        AUTHORIZATIONS AND PROTECTIONS

 

As agent for the Purchaser hereunder, Agent and Georgeson, respectively:

 

10.1         Shall have no duties or obligations other than those specifically set forth herein or as may subsequently be agreed to in writing by Agent or Georgeson, as applicable, and the Purchaser;

 

10.2         Shall have no obligation to make any payment for the Shares unless the Purchaser shall have provided the necessary federal or other immediately available funds to pay in full amounts due and payable with respect thereto;

 

10.3         Shall be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value, or genuineness of any certificates or the Shares represented thereby surrendered hereunder and will not be required to or be responsible for and will make no representations as to, the validity, sufficiency, value or genuineness of the Offer;

 

10.4         Shall not be obligated to take any legal action hereunder; if, however, Agent or Georgeson, as applicable, determines to take any legal action hereunder, and where the taking of such action might, in such party’s judgment, subject or expose it to any expense or liability, Agent or Georgeson, as applicable, shall not be required to act unless it shall have been furnished with an indemnity satisfactory to it;

 

10.5         May rely on and shall be fully authorized and protected in acting or failing to act upon any certificate, instrument, opinion, notice, letter, telegram, telex, facsimile transmission or other document or security delivered to Agent and believed by Agent or by Georgeson, as applicable, to be genuine and to have been signed by the proper party or parties;

 

10.6         Shall not be liable or responsible for any recital or statement contained in the Offer to Purchase or any other documents relating thereto;

 

10.7         Shall not be liable or responsible for any failure of the Purchaser or any other party to comply with any of its covenants and obligations relating to the Offer, including without limitation obligations under applicable securities laws;

 

10.8         Shall not be liable to any holder of the Shares for any property that has been delivered to a public official pursuant to applicable abandoned property law;

 

10.9         May, from time to time, rely on instructions provided by the Purchaser concerning the services provided hereunder. Further, Agent or Georgeson, as applicable, may apply to any officer or other authorized person of Purchaser for instruction, and may consult with legal counsel for Agent or Georgeson, as applicable, or the Purchaser with respect to any matter arising in connection with the services provided hereunder. Agent and its agents and subcontractors shall not be liable and shall be indemnified by Purchaser under Article III, Section 12.2 of this Agreement for any action taken or omitted by Agent or Georgeson, as applicable, in reliance upon any Purchaser instructions or upon the advice or opinion of such counsel. Neither Agent nor Georgeson shall be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Purchaser;

 

1010        May rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by an “eligible guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable “signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing; or (b) any law, act, regulation or any interpretation of the same even though such law, act, or regulation may thereafter have been altered, changed, amended or repealed;

Page 10 

 

 

10.11       Either in connection with, or independent of the instruction term in Article III, Section 10.9 above, Agent or Georgeson, as applicable, may consult counsel satisfactory to such party (including internal counsel), and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by Agent or Georgeson, as applicable, hereunder in good faith and in reliance upon the advice of such counsel;

 

10.12       May perform any of its duties hereunder either directly or by or through agents or attorneys and neither Agent nor Georgeson shall be liable or responsible for any misconduct or negligence on the part of any agent or attorney appointed with reasonable care hereunder; and

 

10.13       Is not authorized, and shall have no obligation, to pay any brokers, dealers, or soliciting fees to any person.

 

11.          REPRESENTATIONS AND WARRANTIES

 

11.1Agent. Agent represents and warrants to Purchaser that:

 

(a)Governance. Trust Company is a federally chartered trust company duly organized, validly existing, and in good standing under the laws of the United States and Computershare is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and each has full power, authority and legal right to execute, deliver and perform this Agreement; and

 

(b)Compliance with Laws. The execution, delivery and performance of this Agreement by Agent has been duly authorized by all necessary action, constitutes the legal, valid and binding obligation of Agent enforceable against Agent in accordance with its terms, will not require the consent of any third party that has not been given, and will not violate, conflict with or result in the breach of any material term, condition or provision of (i) any existing law, ordinance, or governmental rule or regulation to which Agent is subject, (ii) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority applicable to Agent, (iii) Agent’s incorporation documents or by-laws, or (iv) any material agreement to which Agent is a party.

 

11.2Purchaser. Purchaser represents and warrants to Agent that:

 

(a)Governance. It is a corporation duly organized, validly existing and in good standing under the laws of the State of _Maryland_, and it has full power, authority and legal right to enter into and perform this Agreement;

 

(b)Compliance with Laws. The execution, delivery and performance of this Agreement by Purchaser has been duly authorized by all necessary action, constitutes the legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, will not require the consent of any third party that has not been given, and will not violate, conflict with or result in the breach of any material term, condition or provision of (i) any existing law, ordinance, or governmental rule or regulation to which Purchaser is subject, (ii) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority applicable to Purchaser, (iii) Purchaser’s incorporation documents or by-laws, (iv) any material agreement to which Purchaser is a party, or (v) any applicable stock exchange rules; and

 

(c)Shares. The Shares issued and outstanding on the date hereof have been duly authorized, validly issued and are fully paid and are non-assessable.

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11.3Georgeson. Georgeson represents and warrants to Purchaser that:

 

(a)Governance. Information Agent is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has full power, authority and legal right to execute, deliver and perform this Agreement; and

 

(b)Compliance with Laws. The execution, delivery and performance of this Agreement by Georgeson has been duly authorized by all necessary action, constitutes the legal, valid and binding obligation of Georgeson enforceable against Georgeson in accordance with its terms, will not require the consent of any third party that has not been given, and will not violate, conflict with or result in the breach of any material term, condition or provision of (i) any existing law, ordinance, or governmental rule or regulation to which Georgeson is subject, (ii) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority applicable to Georgeson, (iii) Georgeson’s incorporation documents or by-laws, or (iv) any material agreement to which Georgeson is a party.

 

12.      INDEMNIFICATION AND LIMITATION OF LIABILITY

 

12.1 Liability. Agent and Georgeson shall only be liable, severally and not jointly, for any loss or damage determined by a court of competent jurisdiction to be a result of Agent’s or Georgeson‘s respective gross negligence or willful misconduct; provided that any respective liability of Agent and Georgeson will be limited in the aggregate to the amounts paid hereunder by Purchaser to Agent or Georgeson, respectively, as fees and charges, but not including reimbursable expenses.

 

12.2 Indemnity. Purchaser shall indemnify and hold Agent and Georgeson harmless from and against, and neither Agent nor Georgeson shall be responsible for, any and all losses, claims, damages, costs, charges, counsel fees and expenses, payments, expenses and liability (collectively, “Losses”) arising out of or attributable to Agent’s or Georgeson’s respective duties under this Agreement or this appointment, including the reasonable costs and expenses of defending itself against any Loss or enforcing this Agreement, except for any liability of Agent or Georgeson as set forth in Article III, Section 12.1 above.

 

13.      DAMAGES

 

Notwithstanding anything in this Agreement to the contrary, no party shall be liable to any other for any incidental, indirect, special or consequential damages of any nature whatsoever, including, but not limited to, loss of anticipated profits, occasioned by a breach of any provision of this Agreement even if apprised of the possibility of such damages.

 

14.     CONFIDENTIALITY

 

14.1 Definition. “Confidential Information” shall mean any and all technical or business information relating to a party, including, without limitation, financial, marketing and product development information, shareholder data (including any non-public information of such shareholder), proprietary information, and the terms and conditions (but not the existence) of this Agreement, that is disclosed or otherwise becomes known to the other party or its affiliates, agents or representatives before or during the term of this Agreement. Confidential Information constitutes trade secrets and is of great value to the owner (or its affiliates). Confidential Information shall not include any information that is: (a) already known to the other party or its affiliates at the time of the disclosure; (b) publicly known at the time of the disclosure or becomes publicly known through no wrongful act or failure of the other party; (c) subsequently disclosed to the other party or its affiliates on a non-confidential basis by a third party not having a confidential relationship with the owner and which rightfully acquired such information; or (d) independently developed by one party without access to the Confidential Information of the other.

 

14.2 Use and Disclosure. All Confidential Information of a party will be held in confidence by the other party with at least the same degree of care as such party protects its own confidential or proprietary information of like kind and import, but not less than a reasonable degree of care. Neither party will disclose in any manner Confidential Information of the other party in any form to any person or entity without the other party's prior consent. However, each party may disclose relevant aspects of the other party's Confidential Information to its officers, affiliates, agents, subcontractors and employees to the extent reasonably necessary to perform its duties and obligations under this Agreement and such disclosure is not prohibited by applicable law. Without limiting the foregoing, each party will implement such physical and other security measures and controls which are designed to protect (a) the security and confidentiality of Confidential Information; (b) against any threats or hazards to the security and integrity of Confidential Information; and (c) against any unauthorized access to or use of Confidential Information. To the extent that a party delegates any duties and responsibilities under this Agreement to an agent or other subcontractor, the party ensures that such agent and subcontractor are contractually bound to confidentiality terms consistent with the terms of this Article III, Section 14.

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14.3 Required or Permitted Disclosure. In the event that any requests or demands are made for the disclosure of Confidential Information, other than requests to Agent or Georgeson, as applicable, for shareholder records pursuant to standard subpoenas from state or federal government authorities (e.g., divorce and criminal actions), the party receiving such request will promptly notify the other party to secure instructions from an authorized officer of such party as to such request and to enable the other party the opportunity to obtain a protective order or other confidential treatment, unless such notification is otherwise prohibited by law or court order. Each party expressly reserves the right, however, to disclose Confidential Information to any person whenever it is advised by counsel that it may be held liable for the failure to disclose such Confidential Information or if required by law or court order.

 

14.4  Unauthorized Disclosure. As may be required by law and without limiting any party's rights in respect of a breach of this Article III, Section 14, each party will promptly:

 

(a)   Notify the other party in writing of any unauthorized possession, use or disclosure of the other party's Confidential Information by any person or entity that may become known to such party;

 

(b)   Furnish to the other party full details of the unauthorized possession, use or disclosure; and

 

(c)   Use commercially reasonable efforts to prevent a recurrence of any such unauthorized possession, use or disclosure of Confidential Information.

 

14.5  Costs. Each party will bear the costs it incurs as a result of compliance with this Article III, Section 14.

 

15.       TERMINATION

 

15.1 Depositary. The Agent or the Purchaser may, with respect to the depositary services, terminate this Agreement upon 30 days prior written notice to the other party. Unless so terminated, this Agreement shall continue in effect until all Shares have been received and paid for, or until the final delivery of all Tender Consideration(s) to the appropriate states as unclaimed property. In the event of such termination, the Purchaser will appoint a successor agent and inform Agent of the name and address of any successor agent so appointed, provided that no failure by the Purchaser to appoint such a successor agent shall affect the termination of this Agreement or the discharge of Agent as agent hereunder. Upon any such termination, Agent shall be relieved and discharged of any further responsibilities with respect to its duties hereunder. Upon payment of all outstanding fees and expenses hereunder, Agent shall promptly forward to the Purchaser or its designee any unpaid Tender Consideration deposited with Agent pursuant to Article III, Section 4 hereof.

 

15.2 Information Agent. Either Georgeson or the Purchaser may, with respect to the IA Services, terminate this Agreement upon 30 days prior written notice to the other party. Unless so terminated, this Agreement shall, with respect to IA Services continue in effect for the term of the Offer and any extension thereof, and shall terminate upon the final expiration of the Offer.

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15.3 Notices of termination delivered pursuant to Article III, Section 15.1, above, will not be deemed to terminate IA Services. Likewise, termination pursuant to Article III, Section 15.2, above, will not be deemed to terminate depositary services.

 

16.     COMPENSATION AND EXPENSES

 

16.1        The Purchaser shall pay to Agent and to Georgeson, respectively, compensation in accordance with the attached Exhibit B, together with reimbursement for reasonable fees and disbursements of counsel, regardless of whether any Shares are surrendered to Agent, for Agent’s services as agent hereunder, and for Georgeson’s services as information agent hereunder.

 

16.2        The Purchaser shall be charged for certain expenses advanced or incurred by Agent and Georgeson in connection with the performance of their respective duties hereunder. Such charges include, but are not limited to, stationery and supplies, such as checks, envelopes and paper stock, as well as any disbursements for telephone and document creation and delivery. While both Agent and Georgeson endeavor to maintain such charges (both internal and external) at competitive rates, these charges may not reflect actual out-of-pocket costs, and may include handling charges to cover internal processing and use of Agent’s and Georgeson’s billing systems.

 

16.3        If any out-of-proof condition caused by the Purchaser or any of its prior agents arises during any terms of this agreement, the Purchaser will, promptly upon Agent’s request, provide Agent with funds or Shares sufficient to resolve the out-of-proof condition.

 

16.4        All amounts owed to Agent and Georgeson hereunder are due within thirty (30) days of the invoice date. Delinquent payments are subject to a late payment charge of one and one half percent (1.5%) per month commencing forty-five (45) days from the invoice date. The Purchaser agrees to reimburse Agent and Georgeson for any attorney’s fees and any other costs associated with collecting delinquent payments.

 

16.5        The parties hereto agree that in the event that Agent and Georgeson commence performance under this Agreement, which performance may include, inter alia, initial project set-up activity, balancing and reconciliation, loading files, preparing letters of transmittal or other documents, as applicable, but the transaction contemplated hereunder is not initiated for any reason, the Purchaser agrees to pay, in any event, the Event Management fee and the IA Services base fee, set forth in Exhibit B, attached hereto. In addition, the Purchaser agrees to pay any expenses incurred by the Agent in connection with the services hereunder, up to and including the date on which Agent receives written notice of termination pursuant to Article III, Section 15 hereof.

 

16.6        Following initiation and notice of  termination of this Agreement for any reason, the Purchaser hereby agrees to pay on or before the effective date of such termination (a) all fees earned and expenses set forth on the attached Exhibit B incurred by Agent through and including the date of such termination, including, in any event, the Event Management Fee, and (b) all costs and expenses associated with the movement of records, materials, and services to Purchaser or the successor agent, including all reasonable expense.

 

16.7        Purchaser is responsible for all taxes, levies, duties, and assessments levied on services purchased under this Agreement (collectively, “Transaction Taxes”).  Computershare is responsible for collecting and remitting Transaction Taxes in all jurisdictions in which Computershare is registered to collect such Transaction Taxes.  Computershare shall invoice Purchaser for such Transaction Taxes that Computershare is obligated to collect upon the furnishing of services provided hereunder.  Purchaser shall pay such Transaction Taxes according to the terms in Article III, Section 16.1, above.  Computershare shall timely remit to the appropriate governmental authorities all such Transaction Taxes that Computershare collects from Purchaser.  To the extent that Purchaser provides Computershare with valid exemption certificates, direct pay permits, or other documentation that exempts Computershare from collecting Transaction Taxes from Purchaser, invoices issued for services hereunder provided after Computershare’s receipt of such certificates, permits, or other documentation will not reflect exempted Transaction Taxes.  Computershare is solely responsible for the payment of all personal property taxes, franchise taxes, corporate excise or privilege taxes, property or license taxes, taxes relating to Computershare’s personnel, and taxes based on Computershare’s net income or gross revenues relating to services provided hereunder.

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17.       ASSIGNMENT

 

Neither this Agreement nor any rights or obligations hereunder may be assigned by Purchaser or Agent without the written consent of the other; provided, however, that Agent may, without further consent of Purchaser, assign any of its rights and obligations hereunder to any affiliated agent registered under Rule 17Ac2-1 promulgated under the 1934 Act.

 

18.      SUBCONTRACTORS AND UNAFFILIATED THIRD PARTIES

 

18.1         Subcontractors. Agent may, without further consent of Purchaser, subcontract with (a) any affiliates, or (b) unaffiliated subcontractors for such services as may be required from time to time (e.g. lost shareholder searches, escheatment, telephone and mailing services); provided, however, that Agent shall be as fully responsible to Purchaser for the acts and omissions of any subcontractor as it is for its own acts and omissions.

 

18.2         Unaffiliated Third Parties. Nothing herein shall impose any duty upon Agent in connection with or make Agent liable for the actions or omissions to act of unaffiliated third parties (other than subcontractors referenced in Article III, Section 18.1 of this Agreement) such as, by way of example and not limitation, airborne services, delivery services, the U.S. mails, and telecommunication companies, provided, if Agent selected such company, Agent exercised due care in selecting the same.

 

19.     MISCELLANEOUS

 

19.1         Notices. All notices, demands and other communications given pursuant to the terms and provisions hereof shall be in writing, shall be deemed effective on the date of receipt, and may be sent by overnight delivery services, or by certified or registered mail, return receipt requested to: 

 

If to the Purchaser: with an additional copy to:

 

Tortoise Capital Advisors, L.L.C.

6363 College Boulevard, Suite 100A

Overland Park, KS 66211

 

Attn: Brad Adams

badams@tortoiseecofin.com

 

Sean Wickliffe (swickliffe@tortoiseecofin.com)

Invoice for Fees and Services (if different than above):

 

Same as above.

 

If to Agent (as applicable): with an additional copy to:

 

Computershare Inc.

480 Washington Blvd, 29th Floor

Jersey City, NJ 07310

Attn: Corp Actions Relationship Manager

 

Computershare Inc.

150 Royall Street

Canton, MA 02021

Attn: Legal Department 

Or

Computershare Inc.

150 Royall Street

Canton, MA 02021

Attn: Corp Actions Relationship Manager

Page 15 

 

 

If to Georgeson:

 

Georgeson LLC

1290 Avenue of the Americas, 9th Floor,

New York, NY 10104

Attn: Relationship Manager 

with an additional copy to:

 

Georgeson LLC

480 Washington Blvd, 29th Floor

Jersey City, NJ 07310

Attn: Legal Department 

 

19.2         No Expenditure of Funds. No provision of this Agreement shall require Agent or Georgeson, as applicable, to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if it shall believe in good faith that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

19.3         Publicity. No party shall issue a news release, public announcement, advertisement, or other form of publicity concerning the existence of this Agreement or the Services to be provided hereunder without obtaining the prior written approval of the other party, which may be withheld in the other party’s sole discretion; provided that Agent and Georgeson may each use Purchaser’s name in their respective customer lists or otherwise as required by law or regulation.

 

19.4         Successors. All the covenants and provisions of this Agreement by or for the benefit of Purchaser or Agent and Georgeson, as applicable, shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

19.5         Amendments. This Agreement may be amended or modified by a written amendment executed by the parties hereto and, to the extent required, authorized by a resolution of the Board of Directors of Purchaser.

 

19.6         Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provision, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

19.7         Governing Law; Jurisdiction. This Agreement shall be governed by the laws of the State of New York, without regard to principles of conflicts of law. The parties irrevocably, (a) submit to the non-exclusive jurisdiction of any New York State court sitting in New York City or the United States District Court for the Southern District of New York in any action or proceeding arising out of or relating to this Agreement, (b) waive, to the fullest extent they may effectively do so, any defense based on inconvenient forum, improper venue or lack of jurisdiction to the maintenance of any such action or proceeding, and (c) waive all right to trial by jury in any action, proceeding or counterclaim arising out of this Agreement or the transactions contemplated hereby. Neither Agent nor Georgeson shall be required hereunder to comply with the laws or regulations of any country other than the United States of America or any political subdivision thereof. Agent and Georgeson may each consult with foreign counsel, at Purchaser’s expense, to resolve any foreign law issues that may arise as a result of Purchaser or any other party being subject to the laws or regulations of any foreign jurisdiction.

 

19.8         Force Majeure. Neither Agent nor Georgeson will be liable for any delay or failure in performance when such delay or failure arises from circumstances beyond its reasonable control, including without limitation acts of God, acts of government in its sovereign or contractual capacity, acts of public enemy or terrorists, acts of civil or military authority, war, riots, civil strife, terrorism, blockades, sabotage, rationing, embargoes, epidemics, pandemics, outbreaks of infectious diseases or any other public health crises, earthquakes, fire, flood, other natural disaster, quarantine or any other employee restrictions, power shortages or failures, utility or communication failure or delays, labor disputes, strikes, or shortages, supply shortages, equipment failures, or software malfunctions.

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19.9         Third Party Beneficiaries. The provisions of this Agreement are intended to benefit only Agent, Georgeson, Purchaser and their respective permitted successors and assigns. No rights shall be granted to any other person by virtue of this Agreement, and there are no third party beneficiaries hereof.

 

19.10       Survival. All provisions regarding indemnification, warranty, liability and limits thereon, compensation and expenses and confidentiality and protection of proprietary rights and trade secrets shall survive the termination or expiration of this Agreement.

19.11       Priorities. In the event of any conflict, discrepancy, or ambiguity between the terms and conditions contained in (a) this Agreement, (b) any schedules or attachments hereto, and (c) the Offer to Purchase, the terms and conditions contained in this Agreement shall take precedence.

 

19.12       Merger of Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof, whether oral or written.

 

19.13       No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by all parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

19.14       Descriptive Headings. Descriptive headings contained in this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

19.15       Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature.

 

[The remainder of this page has been intentionally left blank. Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of Effective Date hereof.

 

tortoise power and energy infrastructure fund, inc.,

 

By:    
     
Name: P. Bradley Adams  
     
Title: Chief Executive Officer  

 

COMPUTERSHARE TRUST COMPANY, N.A., and

COMPUTERSHARE INC.,

 

On behalf of both entities

 

By:    
     
Name:    
     
Title:    

 

GEORGESON LLC

 

By:    
     
Name:    
     
Title:    

 

Exhibit A Tax Instruction and Cost Basis Information Letter
Exhibit B Schedule of Fees
Exhibit C List of affiliates, Ineligible Shares, and Plans
Exhibit D Wire Instructions

Page 1 

 

 

EXHIBIT A;

 

Section 1

 

Standard Tax Reporting Instructions

 

Pursuant to the Emergency Economic Stabilization Act of 2008, financial intermediaries such as Computershare must report cost basis for certain types of securities acquired after January 1, 2011 to both security holders and the IRS. In preparation for the year-end tax reporting to be performed by Computershare under our service agreement for the corporate actions event described in Section 2 of this agreement, please (a) complete the below Year End Tax Reporting Package and (b) provide us with the pertinent issuer statement (i.e., hard copy or website link requested in Section 4 below) as required of issuers under Internal Revenue Code Section 6045B and the underlying Treasury regulations.

 

In the event that you have not yet produced the issuer statement, kindly provide us with the requisite information at your earliest convenience when completed. You may find it helpful to refer to the below link on the IRS website for some background information regarding the issuer’s obligation to produce the issuer statement.

 

https://www.irs.gov/forms-pubs/form-8937-report-of-organizational-actions-affecting-basis-of-securities

 

Please review, complete, execute and return the Year End Tax Reporting Package or the Form 8937, attached documents via e-mail. By requesting cost basis information, Computershare has fulfilled its regulatory obligation. Failure to provide correct basis information may result in a liability to you as an issuer, but if we can provide additional details, please feel free to call upon us.

 

Additional information may be required based on the completion of the information provided below.

 

PLEASE NOTE: If IRC sections 302/304 apply to this Corporate Actions event, please reach out to the Corporate Actions Relationship Manager listed on Wire Instruction Exhibit of this Agreement to provide further details.

Page 1 

 

 

Year End Tax Reporting Package

 

Computershare cannot provide tax advice for purposes of completing this worksheet. Please consult your tax counsel to determine your respective tax reporting requirements.

 

Shareholder accounts without certified TIN, or certification of foreign status on our system of record will be subject to backup withholding tax at the applicable rate in accordance with IRS rules and regulations regarding 1099 tax reporting. The applicable backup withholding tax deducted from their payment will be remitted to the Internal Revenue Service (IRS). Holders will need to claim any refund of over withholding directly from the IRS and not Computershare. Please note residents or holders that are uncertified, and reside in the state of CA will be withheld an additional 7% which will be remitted to the state of CA.

 

Important: Computershare uses Constructive Receipt (refer to below definition) reporting for its standard tax reporting default. Deviations from our Standard Default Tax Terms, late submissions and subsequent corrections after the event is over will be subject to additional fees, by appraisal. If Computershare does not receive the completed tax letter by the expiration of the offer /effective date of the distribution or exchange, Computershare will use our Standard Default Tax Terms.

 

Computershare will perform form suppression on de minimis reporting for the following: on 1099-B tax forms less than $20 in proceeds and fractional share issuance if no withholding; 1099-DIV tax forms less than $10 in dividend income if no withholding.

 

Computershare will not be liable for any IRS penalties resulting from any client changes to this tax letter or client delay in any final tax instructions that will alter our initial tax reporting instructions. Should any withholding be remitted late to the IRS as a result of any changes to your initial tax reporting instructions. Company and/or Purchaser will be responsible for obligations related to penalties and interest as noted under the Section of the Agreement titled “Indemnification and Limitation of Liability.”

 

Definitions:

Constructive Receipt: Constructive Receipt means that any corporate action exchange proceeds would be reported to the IRS in the year the merger is effective, whether or not the shareholder has presented the requisite and valid documentation in such year.

 

Standard Default Tax Terms: The share consideration (if any) is considered a non-taxable event with no Fair Market Value Reporting (FMV) on shares. Principal and CIL are reported on form 1099B as constructive receipt. In the event of an exchange, dividends declared after the effective date, will accrue on the shares issuable to un-exchanged holders and tax reported “as if” paid currently.

Page 2 

 

 

Section 2 – Client Information 

 

Client Name: Tortoise Power and Energy Infrastructure Fund, Inc.

 

Tax ID/EIN: 26-0573018

 

Issue Description/Type: C-Corporation

 

CUSIP Number(s): 89147X104

 

Will you require Computershare to perform tax reporting services for this transaction?

          x Yes                  ¨ No***

 

***If you mark the above box “No”, an explanation of either how the consideration will be tax reported, or why tax reporting is not applicable (i.e. K1, W-2, etc.), is required. Please provide this explanation in Section 5 where it indicates “If you answered “No” in Section 2.

 

Section 3 – Standard 1099 Reporting

 

3.A – Principal payment / cash in lieu of fractional shares

 

If 3.A is not applicable, please check here and move to 3.B        ¨

 

Computershare to report principal payment on Form 1099-B.

Yes, on Form 1099-B x Yes, on a form other than Form 1099-B. Please complete Section 3.C ¨

 

Computershare to report cash in lieu payment for fractional shares made to holders.

Yes, on Form 1099-B x Yes, on a form other than Form 1099-B. Please complete Section 3.C ¨

 

3.B – Dividend Reporting (including accrued dividends for unexchanged accounts)

 

If 3.B is not applicable, please check here and move to Section 3.C x

 

Dividends that have been paid in conjunction with Corporate Actions payments, deemed or accrued, such payment will be reported as Constructive Receipt on Form 1099-DIV or 1042-S.

 

Computershare to report dividends on Forms 1099-DIV / 1042-S.

Yes, Form 1099-DIV/1042-SB ¨ Yes, on a form other than Form 1099-DIV/1042=S.¨ Please explain

 

Did the Purchaser distribute qualified dividends (100% ordinary & 100% qualified) for this tax year on the Newco shares?

 

Yes ¨             *No ¨

 

*If no, please provide us with your worksheet to ensure all reportable income or reclassification income, paid by Computershare as agent, is reported correctly. Please note that up to five decimal points can be utilized in the reallocation process. If you choose to use less than five decimal points this could result in rounding issues. Due to time constraints inherent with tax season, we will not be able to re-run tax forms due to rounding issues. Please provide us with your worksheet reflecting all distributions for this applicable tax year.

Page 3 

 

 

3.C – Additional reporting

 

If 3.C is not applicable, please check here and move to Section 4 x

 

Does any of the following reporting need to be performed by Computershare for cash paid (i.e., principal, cash in lieu) if not to be tax reported on Form 1099-B?

 

1099-INT  ¨   1099-OID    ¨   1099-MISC ¨      1099-DIV   ¨    1042-S ¨

 

If you selected 1099-INT, 1099-OID or 1099-MISC above, please complete the below. Specify which box on the Form should be used for reportable amounts:

 

Reporting Box for 1099-INT:  
   
Reporting Box for 1099-OID:  
   
Reporting Box for 1099-MISC:  

 

If you selected 1099-DIV and/or 1042-S above, please complete the below.

 

Reporting for merger consideration (other than accrued and unpaid dividends as outlined below), on Form 1099-DIV and/or 1042-S is as follows:

 

 

 

 

 

 

 

 

 

 

Page 4 

 

 

Section 4 – Cost Basis

 

Please provide a copy of the completed Issuer Statement (IRS Form 8937 ) or link to where the Tax & Cost Basis information can be found. If you are unable to provide the link or information pertaining to the Issuer Statement or such IRS filing requirement does not apply, you must answer the questions below.

 

What are the Cost Basis implications due to this Corporate Action? Please include the details of any calculation that needs to be applied to existing cost basis, or provide an explanation if the IRS filing requirement for Form 8937 does not apply to this event.

 

N/A – link to Form 8937 will be provided after completion of the offer.  
   
   
   
   

 

Section 5 – Additional Information 

 

Did any of the following corporate changes occur during the same year in which this corporate action took place?

 

  a) Name Change? Yes ¨ No x
  b) Tax Id Number Change? Yes ¨ No x
  c) CUSIP Number Change? Yes ¨ No x
  d) Cash Liquidating Distribution Yes ¨ No x
  e) Non-Cash Liquidating Distribution Yes ¨ No x
  f) Sale of Rights payment Yes ¨ No x

 

Is any additional tax reporting required, other than what has been stated in Section 3 above (specify below)?

 

NO  
   
   
   
   

 

If you answered “No” in Section 2 above indicating that you do not require Computershare to perform tax reporting, please explain below.

 

 
   
N/A  
   
   

Page 5 

 

 

Section 6 – Additional Information continued

 

Is any additional tax withholding required other than what has been stated in Section 3 above (specify below)?

 

NO  
   
   
   
   

 

Section 7

 

Fair Market Value (FMV) Tax Reporting Instructions  

 

Pursuant to the Emergency Economic Stabilization Act of 2008, financial intermediaries such as Computershare must report cost basis for certain types of securities acquired after January 1, 2011 to both security holders and the IRS. In preparation for the year-end tax reporting to be performed by Computershare under our service agreement for the corporate actions event described in Section 1 of this agreement, please (a) complete the below Tax and Cost Basis package and (b) provide us with the pertinent issuer statement (i.e., hard copy or website link requested in Section 8 below) as required of issuers under Internal Revenue Code Section 6045B and the underlying Treasury regulations.

 

In the event that you have not yet produced the issuer statement, kindly provide us with the requisite information at your earliest convenience when completed. You may find it helpful to refer to the below link on the IRS website for some background information regarding the issuer’s obligation to produce the issuer statement.

 

https://www.irs.gov/forms-pubs/form-8937-report-of-organizational-actions-affecting-basis-of-securities

 

Please review, complete, execute and return the below Tax Letter and either the Cost Basis word document or the Form 8937, attached documents via e-mail. By requesting cost basis information, Computershare has fulfilled its regulatory obligation. Failure to provide correct basis information may result in a liability to you as an issuer, but if we can provide additional details, please feel free to call upon us.

 

Additional information may be required based on the completion of the information provided below.

 

PLEASE NOTE: If 302/304 Tax Reporting is requirements please reach out to the Corporate Actions Relationship Manager listed on the Wire Instruction Exhibit of this Agreement

Page 6 

 

 

Year End Tax Reporting Package

 

Computershare cannot provide tax advice for purposes of completing this worksheet. Please consult your tax counsel to determine your respective tax reporting requirements.

 

Shareholder accounts without certified TIN, or foreign status on our system of record will be subject to backup withholding tax at the applicable rate in accordance with IRS rules and regulations regarding 1099 tax reporting. The applicable backup withholding tax deducted from their payment will be remitted to the Internal Revenue Service (IRS). Holders will need to claim any refund of over withholding directly from the IRS and not Computershare. Please note residents or holders that are uncertified, and reside in the state of CA will be withheld an additional 7% which will be remitted to the state of CA.

 

Important: Computershare uses Constructive Receipt reporting for its standard tax reporting default. Deviations from our Standard Default Tax Terms, late submissions and subsequent corrections after the event is over will be subject to additional fees, by appraisal. If Computershare does not receive the completed tax letter by the expiration of the offer /effective date of the distribution or exchange, Computershare will use our Standard Default Tax Terms.

 

Fair Market Value Reporting (FMV) is subject to additional fees, by appraisal.

 

Computershare will perform form suppression on de minimis reporting for the following: on 1099-B tax forms less than $20 in proceeds and fractional share issuance if no withholding; 1099-DIV tax forms less than $10 in dividend income if no withholding.

 

Computershare will not be liable for any IRS penalties resulting from any client changes to this tax letter or client delay in any final tax instructions that will alter our initial tax reporting instructions. Should any withholding be remitted late to the IRS as a result of any changes to your initial tax reporting instructions. Company will be responsible for obligations related to penalties and interest as noted under the Section of the Agreement titled “Indemnification and Limitation of Liability.”

 

Definitions: 

Constructive Receipt: Constructive Receipt means that any corporate action exchange proceeds would be reported to the IRS in the year the merger is finalized, regardless of whether the shareholder has already processed the exchange or not.

 

Standard Default Tax Terms: The share distribution is considered a non-taxable event with no Fair Market Value Reporting (FMV) on shares. Principal and CIL are reported on form 1099B as constructive receipt. In the event of an exchange, dividends declared after the effective date, will accrue on the shares issuable to un-exchanged holders.

 

Fair Market Value (FMV) tax reporting: Refers to an exchange where the share consideration) is treated as fully taxable and reportable on Form 1099-B at the per share valuation provided by client.

Page 7 

 

 

Section 8 – Client Information

 

 

Client Name:

 

*Tax ID/EIN:

 

*If FMV reporting is required, the Issuer (Acquirer) will be deemed the payor and you must provide your EIN for reporting purposes. In addition, Client must provide Computershare with completed IRS Form 2678 in order for Computershare to remit any backup withholding tax to the IRS on client’s behalf.

 

Issue Description/Type:

 

 

 

CUSIP Number(s):

 

 

 

Will you require Computershare to perform FMV tax reporting services for this transaction?

☐   Yes                     ☐ No***

 

***If you mark the above box “No” the value of all newly issued shares will NOT be tax reported to the holders and any cost basis and acquisition date of the surrendered target company shares will be carried over to the new shares. Please refer to Section 3.

Page 8 

 

 

Section 9

 

Fair Market Value reporting

 

We ask that you read each question below carefully and respond to each question accordingly as this questionnaire requires a great deal of attention.

 

Taxable Event Information

 

Please check one of the boxes below regarding the following statement.

 

This event requires Fair Market Value (FMV) reporting on Form 1099-B as the share consideration received in this transaction is a taxable event to former target holders and as such the basis of the new shares received will be the FMV rate and become covered shares (i.e., date of acquisition is the effective date).

 

True ¨                                 *False ¨

 

*If the above statement is “False”, please provide an explanation as to why:

 

 

 

 

 

 

 

 

 

 

 

 

If the FMV share consideration is nontaxable, and not tax reportable, please confirm by checking a box below:

 

*True ¨                                  **False ¨

 

*If you selected “True”, please explain briefly why the FMV share consideration is nontaxable, and whether the “cash” (if any) is tax reportable on Form 1099-B:

 

 

 

 

 

 

 

 

Page 9 

 

 

 

 

 

 

**If you selected “False” from the above, is the FMV of the share consideration treated as taxable and reportable on a 1099-B?

 

Yes   ¨                               *No  ¨

 

*If you selected “No”, please advise on the IRS Form & box number in which it should be reported:

 

 

 

Gross Proceeds Information

 

If the transaction with a shareholder should be reported on a 1099-B, and the full amount of the consideration is treated as taxable, is the FMV of the stock consideration, as well as the cash (if any), reportable on Form 1099-B in Box 1d as “Proceeds”?

 

Yes   ¨                               *No  ¨

 

*If you selected “No”, please advise on the rationale as to why the cash and/or stock is not considered as “ proceeds” for 1099-B reporting purposes:

 

 

 

 

 

 

 

 

 

If Form 1099-B reporting is required, should Box 7 on the Form 1099-B (“Check if loss is not allowed based on amount in 1d”) be checked?

 

Yes   ¨                               *No  ¨

 

Backup Withholding Information

 

If you selected “Yes” and indicated that FMV of the share consideration is a taxable exchange and reportable on a 1099-B as “Proceeds”,- please advise on the following questions:

 

Is the share consideration subject to backup withholding? (Uncertified accounts would be entitled to a lowered share amount upon exchange due to withholding of shares to satisfy remittance to the IRS.)

Page 10 

 

 

Yes   ¨                               *No  ¨

 

*If you selected “No”, please provide the basis for selecting “No” so that Tax can review this further.

 

 

 

 

 

 

 

If you selected “Yes” and indicated that shares are subject to backup withholding, please confirm the following statement by selecting “Issuer/Acquirer Agrees”:

 

Computershare is hereby authorized by the Issuer/Acquirer to sell the appropriate number of shares from each shareholder’s share entitlement to cover applicable tax withholding obligations. The withholding obligation arises on the date the reportable consideration is paid.  The shares sold to fund any backup withholding will be based on the amount of withholding required. The current share price may not be exactly the FMV price and may result in a shortage or overage that will either need to be returned to the company or covered by the company.

 

Issuer/Acquirer Agrees                                           ¨

 

If you would prefer that Computershare does not fund the backup withholding obligation by selling the shares, the Issuer/Acquirer can fund the amount of backup withholding required to remit to the IRS in lieu of selling shares. Should you wish to proceed with this alternative, please select the box below:

 

Yes, we will fund the entire balance due in one single wire to Computershare for the backup withholding obligation ¨

 

If you checked the box above, to fund the backup withholding on FMV reporting, the funds you provided will be included in a “gross -up” calculation (to increase a net amount to include deductions, such as taxes, that would be incurred by the receiver) reported on a 1099-B as additional proceeds to the holder.

 

Fair Market Value (FMV)

 

Please provide the value per share associated with the FMV reporting of the share consideration:

___________________

Page 11 

 

 

Form 8937

 

Please provide a copy of the Issuer Statement (IRS Form 8937) or link to where the Tax & Cost Basis information can be found. If you are unable to provide the link or information pertaining to the Issuer Statement, you must answer the questions below.

 

What are the Tax & Cost Basis implications due to this Corporate Action? Please include the details of any calculation that needs to be applied to determine the per share basis of the share consideration received by the target’s holders.

 

 

 

 

 

 

 

 

 

 

Page 12 

 

 

Exhibit B

 

SCHEDULE OF FEES

Computershare

To Serve As Depositary,

And

 Georgeson as Information Agent, In Connection With

[COMPANY NAME] Self-Tender Offer

 

A.            FEES FOR SERVICES*

 

Depository Services
Event Management $52,500.00
Per Fund/CUSIP (First CUSIP is included in above Event Management fee) $10,000.00
Per Tender processed $15.00
Per Eligible Account (Registered) $5.00
Per Payment (Registered) $4.00
Per Account – Tax Servicing (Registered) $2.50
Per Special Handling Presentation By appraisal
Per Guarantee of Delivery or withdrawal $20.00
Calculating pro-rata items, each $5.00
Per extension or subsequent offering period, if applicable $2,500.00
Tax Administration $2,500.00
Expiration other than 5pm EST $5,000.00
Information Agent Services
Base Services (per fund) $3,000.00
Dedicated Toll-Free Number, Call Center Staffing and Training $1,500.00
Outbound communications to Registered/Retail Holders $6.50/call
Inbound communications to call center $2.75/minute
Per extension or subsequent offering period, if applicable $2,000.00
Directory assistance (if required) $0.67 per account
Mobile Phone upcharge $1.50 per number

 

*The above fees exclude expenses and assume the use of Computershare’s standard Agency Agreement and Letter of Transmittal. We agree that in the event that the transaction and/or your services are begun but not completed for any reason, the above Event Management fee will be charged, plus the expense associated with work performed up to the point Computershare is notified. It is required that this agreement be executed on or before the Effective Time. Mailing and processing will not begin until this agreement has been executed by the Company and Computershare. This fee schedule is based upon information provided to date and may be subject to change. CRM# XXXXXXXXXX

Page 1 

 

 

B.       SERVICES COVERED

 

DEPOSITARY - Tender Offer

 

Designating an operational team to carry out Depositary duties

Reviewing the Depositary Agreement and other legal documents

Interfacing with Georgeson (Info Agent), as necessary

Reviewing the Communication Package (i.e., Letter of Transmittal (LT), enclosure letters and other documentation

Converting the Company shareholder files to Computershare’s corporate actions system

Coordinating tender offer with The Depository Trust and Clearing Corporation to facilitate tenders from brokers and street shareholders

Receiving, opening and processing returned LTs

Curing defective LTs, including telephoning and writing shareholders in connection with unsigned or improperly executed LTs

Canceling surrendered certificates

Tracking and reporting the number of shares submitted and the submitting shareholders, as follows: Agent shall forward  up to 10 reports of tender activity by email beginning the last 2 weeks before the expiration to each of the parties named below as to the following information, based upon a preliminary review as of the close of business on the preceding business day:  (i) the number of Shares tendered; (ii) the number of Shares tended represented by certificates physically held by Agent; (iii) the number of Shares represented by Notices of Guaranteed Delivery; (iv) the number of Shares withdrawn; and (v) the cumulative totals of Shares in categories (i) through (iv) above. At the expiration of the offer Agent shall provide a master lists of Shares elected, including a complete list of the electing stockholders. Agent can furnish to the Purchaser, upon reasonable request, additional daily or inter-day ad hoc reports, for an additional fee of $100.00 per report.

Calculating and issuing checks at the completion of the tender period, assuming receipt of properly executed Letters of Transmittal and surrender of shares

Issuing tax forms and filing tax information with the IRS, as required

Enclosing and mailing checks, Forms 1099-B and letters or notices to shareholders

Replacing checks alleged to have been lost or destroyed

 

Information Agent – Tender Offer

 

BASE SERVICES

 

  Advance review of Offer documents
  Strategic advice relating to the Offer
 

Coordination of tombstone advertisement placement in newspapers
  ▪  (cost for advertisement additional and dependent upon newspaper and size of advertisement)
  Dissemination of Offer documents to bank and broker community
  Communication with bank and broker community during Offer period
  Outreach to Professional Investors
  Communication with Depositary Agent to monitor progress of the offer
  Provide progress updates to the advisory team
   

Page 2 

 

 

 
 

ADDITIONAL/SUPPLEMENTAL SERVICES 

   
  ▪  Dedicated Toll-Free Number, Call Center Staffing and Training
  ▪  Outbound communications to Registered/Retail Holders
  ▪  Inbound communications to call center
   

NOTE: The foregoing fees are exclusive of Expenses and custodial charges as described in paragraphs Article II, Sections 3 and 4 of this Agreement.

 

C.       ITEMS NOT COVERED

 

All expenses such as ad hoc reports, printing, checks, postage, stationery, wire transfers, etc. (these will be billed as incurred)

 

D.       ASSUMPTIONS

 

Fee schedule based upon information known at this time about the transaction

Significant changes made in the terms or requirements of this transaction could require modifications to this Fee schedule

Project management fee include pre-launch and ongoing services related to the event, for up to 30 business days. Any application of an additional extension fee will apply for each subsequent two week extension period or any part thereof, of the offer, commencing immediately following the original offer period.

Fee schedule assumes the use of Computershare’s standard legal agreement and Letter of Transmittal

Page 3 

 

 

Exhibit C

 

LIST OF AFFILIATES

 

Shareholder   Certificate Numbers of Old Shares   Disposition  
               
               
               
               
               
               
               
               
               
               
               
               

 

 

SHARES INELIGIBLE FOR EXCHANGE

 

Shareholder   Certificate Numbers of Old Shares   Disposition  
               
               
               
               
               
               
               
               
               
               
               
               

 

PLANS AFFECTED BY THIS EXCHANGE

 

Plan Name     Plan Administrator     Disposition  
               
               
               
               
               
               
               
               
               
               
               
               

Page 1 

 

 

Exhibit D

 

Wire Instructions

 

Please wire all funds RELATED to this Transaction using the following instructions: 

 

 

Bank Name:    
Account Name:    
Account Number:    
ABA Routing Number:    

Ref:    

 

If you have any questions, or need additional information please call me.

 

[                 ]

Relationship Manager

Corporate Actions

T (XXX) XXX-XXX

XXXXXXXXX.XXXXXXXXXXXX@Computershare.com

Page 1 

 

 

EX 107

 

Calculation of Filing Fee Table

 

Schedule TO

(Form Type)

 

Tortoise Power and Energy Infrastructure Fund, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Table 1: CALCULATION OF FEE FILING

 

TRANSACTION VALUATION   AMOUNT OF FILING FEE 
$4,579,514.03(a)  $504.66(b)

 

(a)The Transaction Value is calculated by multiplying 5% of the 6,526,499.30 issued and outstanding Shares of Tortoise Power and Energy Infrastructure Fund, Inc. by 98% of $14.32, the Net Asset Value per share as of the close of ordinary trading on the New York Stock Exchange on September 23, 2022, $36.74. The transaction valuation is estimated solely for purposes of calculating the filing fee and represents the total cost to Registrant of purchasing the estimated maximum number of shares pursuant to the Offer.

(b)Calculated at $110.20 per $1,000,000 of the Transaction Valuation.