APPENDIX A FORM OF AGREEMENT AND PLAN OF REORGANIZATION
APPENDIX
A
_______,
2009
This
Agreement and Plan of Reorganization (“Agreement”) is
entered into as of _____________, 2009, by and between Tortoise Gas and Oil
Corporation, a registered closed-end management investment company, File No.
811-22097 (“TGO”), and Tortoise
North American Energy Corporation, a registered closed-end management investment
company, File No. 811-21700 (“TYN” and together
with TGO, each a “Fund” and
collectively the “Funds”).
The Funds
wish to effect a reorganization described in Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the “Code”), and intend
this Agreement to be, and adopt it as, a "plan of reorganization" within the
meaning of the regulations under the Code. The reorganization will
consist of (i) the acquisition by TYN of substantially all of the assets, and
the assumption by TYN of substantially all of the liabilities, of TGO in
exchange for the issuance by TYN to TGO of an equal aggregate net asset value
(“NAV”)
(calculated as described in Section 4 below) (less TGO’s share of the
Reorganization costs) of newly-issued shares of common stock of TYN, par value
$0.001 per share (the “TYN Common Shares”),
(ii) the distribution by TGO of such TYN Common Shares to its common
stockholders, and (iii) TGO's termination of its registration under
the Investment Company Act of 1940, as amended (the “1940 Act”) and
its dissolution under Maryland law, all on the terms and conditions set forth
herein (collectively, the “Reorganization”).
Each
Fund’s Board of Directors (each, a “Board”), including
all the members thereof who are not “interested persons” (as such term is
defined in Section 2(a)(19) of the 1940 Act) (the “Independent
Directors”), (i) has duly adopted and approved this Agreement and
the transactions contemplated hereby, and (ii) has determined that participation
in the Reorganization is in the best interests of its Fund and its Fund's
stockholders and that the interests of the stockholders thereof will not be
diluted as a result of the Reorganization.
In
consideration of the promises and the covenants and agreements thereinafter set
forth, and intending to be legally bound, TYN and TGO hereby agree as
follows:
1. REPRESENTATIONS
AND WARRANTIES OF TYN.
TYN
represents and warrants to, and agrees with, TGO that:
(a) TYN is a
corporation duly organized, validly existing and in good standing in conformity
with the laws of the State of Maryland, and has the power to own all of its
assets and to carry out this Agreement. TYN has all necessary federal, state and
local authorizations to carry on its business as it is now being conducted and
to carry out this Agreement.
(b) TYN is
duly registered under the 1940 Act as a non-diversified, closed-end management
investment company and such registration has not been revoked or rescinded and
is in full force and effect.
(c) TYN has
full power and authority to enter into and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action of its Board of Directors and this
Agreement constitutes a valid and binding contract enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors’
rights generally and court decisions with respect thereto.
(d) TGO has
been furnished with TYN’s Annual Report to Stockholders for the fiscal year
ended November 30, 2008, and the audited financial statements appearing
therein, having been audited by Ernst & Young LLP, TYN's independent
registered public accounting firm, fairly present the financial position of TYN
as of the respective dates indicated, in conformity with U.S. Generally Accepted
Accounting Principles (“GAAP”), applied on a consistent basis.
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(e) An
unaudited Statement of Assets and Liabilities of TYN and an unaudited Schedule
of Investments of TYN, each as of the Valuation Time (as defined in Section 4
herein), will be furnished to TGO, at or prior to the Closing Date (as defined
in Section 7(a) herein), for the purpose of determining the number of TYN Common
Shares (as defined above) to be issued pursuant to Section 4 of this Agreement;
each will present the financial position of TYN as of the Valuation Time in
conformity with GAAP, applied on a consistent basis.
(f) There are
no material legal, administrative or other proceedings pending or, to the
knowledge of TYN, threatened against it which assert liability on the part of
TYN or which materially affect its financial condition or its ability to
consummate the Reorganization. TYN is not charged with or, to the best of its
knowledge, threatened with any violation or investigation of any possible
violation of any provisions of any federal, state or local law or regulation or
administrative ruling relating to any aspect of its business.
(g) TYN is
not obligated under any provision of its Articles of Incorporation or its
Bylaws, each as amended to the date hereof, and is not a party to any contract
or other commitment or obligation, and is not subject to any order or decree,
which would be violated by its execution of or performance under this Agreement,
except insofar as the Funds have mutually agreed to amend such contract or other
commitment or obligation to cure any potential violation as a condition
precedent to the Reorganization.
(h) There are
no material contracts outstanding to which TYN is a party that have not been
disclosed in the N-14 Registration Statement (as defined in subsection (k)
below) or otherwise disclosed to TGO.
(i) TYN has
no known liabilities of a material amount, contingent or otherwise, other than
those shown on its Statements of Assets and Liabilities referred to in
subsection (e) above, those incurred in the ordinary course of its business as
an investment company, and those incurred in connection with the Reorganization.
As of the Valuation Time, TYN will advise TGO in writing of all known
liabilities, contingent or otherwise, whether or not incurred in the ordinary
course of business, existing or accrued as of such time, except to the extent
disclosed in the financial statements referred to in subsection (e)
above.
(j) No
consent, approval, authorization or order of any court or government authority
is required for the consummation by TYN of the Reorganization, except such as
may be required under the Securities Act of 1933, as amended (the “1933 Act”), the
Securities Exchange Act of 1934, as amended (the “1934 Act”) and the
1940 Act or state securities laws (which term as used herein shall include the
laws of the District of Columbia and Puerto Rico).
(k) The
registration statement filed by TYN on Form N-14, which includes the proxy
statement of TGO and TYN with respect to the transactions contemplated herein
(the “Joint Proxy
Statement/Prospectus”), and any supplement or amendment thereto or to the
documents therein (as amended or supplemented, the “N-14 Registration
Statement”), on its effective date, at the time of the stockholders’
meetings referred to in Section 8(a) of this Agreement and at the Closing Date,
insofar as it relates to TYN and to TYN’s reasonable knowledge,
(i) complied or will comply in all material respects with the provisions of
the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder and (ii) did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and the Joint Proxy
Statement/Prospectus included therein did not or will not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection only shall apply to statements in or omissions
from the N-14 Registration Statement made in reliance upon and in conformity
with information furnished by TYN for use in the N-14 Registration
Statement.
(l) TYN has
filed, or intends to file, or has obtained extensions to file, all federal,
state and local tax returns which are required to be filed by it, and has paid
or has obtained extensions to pay, all federal, state and local taxes shown on
said returns to be due and owing and all assessments received by it, up to and
including the taxable year in which the Closing Date occurs. All tax liabilities
of TYN have been adequately provided for on its books, and no tax deficiency or
liability of TYN has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
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(m) TYN is
authorized to issue 100,000,000 shares of common stock, par value $0.001 per
share. Each outstanding TYN Common Share is fully paid and nonassessable and has
full voting rights.
(n) TYN
Common Shares to be issued to TGO pursuant to this Agreement will have been duly
authorized and, when issued and delivered pursuant to this Agreement, will be
legally and validly issued and will be fully paid and, nonassessable and will
have full voting rights, and no shareholder of TYN will have any preemptive
right of subscription or purchase in respect thereof.
(o) At or
prior to the Closing Date, TYN Common Shares to be transferred to TGO for
distribution to the stockholders of TGO on the Closing Date will be duly
qualified for offering to the public in all states of the United States in which
the sale of shares of a Fund presently are qualified, and there will be a
sufficient number of such shares registered under the 1933 Act and, as may be
necessary, with each pertinent state securities commission to permit the
transfers contemplated by this Agreement to be consummated.
(p) At or
prior to the Closing Date, TYN will have obtained any and all regulatory,
director and stockholder approvals necessary to issue TYN Common Shares to
TGO.
(q) TYN’s
outstanding Series B senior notes (the "Notes") are rated
“AAA” or its equivalent by a nationally recognized statistical rating
organization.
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2.
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REPRESENTATIONS
AND WARRANTIES OF TGO.
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TGO
represents and warrants to, and agrees with, TYN that:
(a) TGO is a
corporation duly organized, validly existing and in good standing in conformity
with the laws of the State of Maryland, and has the power to own all of its
assets and to carry out this Agreement. TGO has all necessary federal, state and
local authorizations to carry on its business as it is now being conducted and
to carry out this Agreement.
(b) TGO is
duly registered under the 1940 Act as a non-diversified, closed-end management
investment company, and such registration has not been revoked or rescinded and
is in full force and effect.
(c) TGO has
full power and authority to enter into and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action of its Board of Directors and this
Agreement constitutes a valid and binding contract enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors’
rights generally and court decisions with respect thereto.
(d) TYN has
been furnished with TGO’s Annual Report to Stockholders for the fiscal year
ended November 30, 2008, and the audited financial statements appearing
therein, having been audited by Ernst & Young LLP, TGO's independent
registered public accounting firm, fairly present the financial position of TGO
as of the respective dates indicated, in conformity with GAAP, applied on a
consistent basis.
(e) An
unaudited Statement of Assets and Liabilities of TGO and an unaudited Schedule
of Investments of TGO, each as of the Valuation Time, will be furnished to TYN
at or prior to the Closing Date for the purpose of determining the number of
shares of TYN Common Shares to be issued to TGO pursuant to Section 3 of this
Agreement; each will present the financial position of TGO as of the Valuation
Time in conformity with GAAP, applied on a consistent basis.
(f) There are
no material legal, administrative or other proceedings pending or, to the
knowledge of TGO, threatened against it which assert liability on the part of
TGO or which materially affect its financial condition or its ability to
consummate the Reorganization. TGO is not charged with or, to the best of its
knowledge, threatened with any violation or investigation of any possible
violation of any provisions of any federal, state or local law or regulation or
administrative ruling relating to any aspect of its business.
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(g) TGO is
not obligated under any provision of its Articles of Incorporation or its
Bylaws, each as amended to the date hereof, or a party to any contract or other
commitment or obligation, and is not subject to any order or decree, which would
be violated by its execution of or performance under this Agreement, except
insofar as the Funds have mutually agreed to amend such contract or other
commitment or obligation to cure any potential violation as a condition
precedent to the Reorganization.
(h) There are
no material contracts outstanding to which TGO is a party that have not been
disclosed in the N-14 Registration Statement or otherwise disclosed to
TYN.
(i) TGO has
no known liabilities of a material amount, contingent or otherwise, other than
those shown on its Statements of Assets and Liabilities referred to in
subsection (e) above, those incurred in the ordinary course of its business as
an investment company and those incurred in connection with the Reorganization.
As of the Valuation Time, TGO will advise TYN in writing of all known
liabilities, contingent or otherwise, whether or not incurred in the ordinary
course of business, existing or accrued as of such time, except to the extent
referred to in subsection (e) above.
(j) No
consent, approval, authorization or order of any court or governmental authority
is required for the consummation by TGO of the Reorganization, except such as
may be required under the 1933 Act, the 1934 Act, the 1940 Act or state
securities laws.
(k) The N-14
Registration Statement, on its effective date, at the time of the stockholders’
meetings called to vote on this Agreement and on the Closing Date, insofar as it
relates to TGO and to TGO’s reasonable knowledge, (i) complied or will comply in
all material respects with the provisions of the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder, and (ii) did not or will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; and the Joint Proxy Statement/Prospectus included therein did
not or will not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall apply only to
statements in or omissions from the N-14 Registration Statement made in reliance
upon and in conformity with information furnished by TGO for use in the N-14
Registration Statement.
(l) TGO has
filed, or intends to file, or has obtained extensions to file, all federal,
state and local tax returns which are required to be filed by it, and has paid
or has obtained extensions to pay, all federal, state and local taxes shown on
said returns to be due and owing and all assessments received by it, up to and
including the taxable year in which the Closing Date occurs. All tax liabilities
of TGO have been adequately provided for on its books, and no tax deficiency or
liability of TGO has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
(m) TGO is
authorized to issue 100,000,000 shares of common stock, par value $0.001 per
share (the “TGO Common
Shares”). Each outstanding TGO Common Share is fully paid and
nonassessable and has full voting rights.
(n) At both
the Valuation Time and the Closing Date, TGO will have full right, power and
authority to sell, assign, transfer and deliver the TGO Investments. As used in
this Agreement, the term “TGO Investments”
shall mean (i) the investments of TGO shown on the Schedule of Investments as of
the Valuation Time furnished to TYN; and (ii) all other assets owned by TGO as
of the Valuation Time. At the Closing Date, subject only to the obligation to
deliver the TGO Investments as contemplated by this Agreement, TGO will have
good and marketable title to all of the TGO Investments, and TYN will acquire
all of the TGO Investments free and clear of any encumbrances, liens or security
interests and without any restrictions upon the transfer thereof (except those
imposed by the federal or state securities laws and those imperfections of title
or encumbrances as do not materially detract from the value or use of the TGO
Investments or materially affect title thereto).
(o) All of
the issued and outstanding TGO Common Shares were offered for sale and sold in
conformity with all applicable federal and state securities laws.
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(p) The books
and records of TGO made available to TYN and/or its counsel are substantially
true and correct and contain no material misstatements or omissions with respect
to the operations of TGO.
(q) TGO will
not sell or otherwise dispose of any of TYN Common Shares to be received in the
Reorganization, except in distribution to the stockholders of TGO, as provided
in Section 3 of this Agreement.
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3.
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THE
REORGANIZATION.
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(a) Subject
to receiving the requisite approvals of the stockholders of TGO and TYN, and to
the other terms and conditions contained herein, TGO agrees to convey, transfer
and deliver to TYN and TYN agrees to acquire from TGO, on the Closing Date, all
of the TGO Investments (including interest, dividends or distributions accrued
as of the Valuation Time), and assume from TGO substantially all of the
liabilities of TGO. In exchange, TGO will receive on the Closing Date
that number of TYN Common Shares and cash for fractional shares as provided in
Section 4 of this Agreement.
(b) Pursuant
to this Agreement, as soon as practicable after the Closing Date, TGO will
distribute all cash (for fractional shares) and TYN Common Shares received by it
to its stockholders of record in exchange for their TGO Common Shares based on
the Exchange Rate (as defined and calculated below). The distribution
of TYN Common Shares to TGO stockholders of record shall be accomplished as
described in Section 4.
(c) The
“Exchange Rate” will be determined by dividing the TGO NAV per share by the TYN
NAV per share, with each calculated at the Valuation Time (less, in each case,
the Reorganization costs for each Fund).
(d) If it is
determined that the portfolios of TGO and TYN, when aggregated, would contain
investments exceeding certain percentage limitations imposed upon TYN with
respect to such investments in its non-fundamental investment policies, TGO, if
requested by TYN, will dispose of a sufficient amount of such investments as may
be necessary to avoid violating such limitations as of the Closing Date.
Notwithstanding the foregoing, (a) nothing herein will require TGO to dispose of
any portfolios, securities or other investments, if, in the reasonable judgment
of TGO’s Board of Directors or Tortoise Capital Advisors, LLC (the “Investment Adviser”),
such disposition would adversely affect the tax-free nature of the
Reorganization for U.S. federal income tax purposes or would otherwise not be in
the best interests of TGO, and (b) nothing will permit TGO to dispose of any
portfolio securities or other investments if, in the reasonable judgment of
TYN’s Board of Directors or the Investment Adviser, such disposition would
adversely affect the tax-free nature of the Reorganization for U.S. federal
income tax purposes or would otherwise not be in the best interests of
TYN.
(e) TGO will
pay or cause to be paid to TYN any accrued interest, dividends or distributions
that TGO receives on or after the Closing Date with respect to any of the TGO
Investments transferred to TYN hereunder.
(f) Recourse
for liabilities assumed from TGO by TYN in the Reorganization will be limited to
the net assets acquired by TYN. The known liabilities of TGO, as of the
Valuation Time, shall be confirmed to TYN pursuant to Section 2(i) of this
Agreement.
(g) TGO will
be terminated and liquidated as soon as practicable following the Closing Date
by terminating its registration under the 1940 Act and dissolving under Maryland
law and will withdraw its authority to do business in any state where it is
registered.
(h) TYN will
use its commercially reasonable efforts to ensure that following the Closing
Date the Notes maintain the ratings in effect as of the Valuation
Time.
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4.
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ISSUANCE
AND VALUATION OF TYN COMMON SHARES IN THE
REORGANIZATION.
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TYN shall
issue to TGO cash (for fractional shares) and TYN Common Shares collectively
having an aggregate value (with the TYN Common Shares valued at their NAV,
adjusted for TYN’s share of the
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Reorganization
costs) equal to the net asset value of TGO, reduced by TGO's share of
reorganization costs (with each amount determined as set forth below), in
exchange for all of the assets and liabilities of TGO.
The NAV
of each Fund shall be determined as of the Valuation Time in accordance with the
normal valuation methodologies adopted by each Fund’s Board of
Directors. The Valuation Time shall be 4:00 p.m., Eastern time, on a
date mutually agreed upon in writing that is expected to promptly follow the
receipt of TGO stockholder approval (the “Valuation
Time”). The value of each Fund's investments (as set forth on
the Schedule of Investments provided pursuant to Sections 1(e) and 2(e)) will be
determined pursuant to the normal valuation methodologies adopted by each Fund’s
Board of Directors, and fair values in all cases shall be determined as of the
Valuation Time. Such valuation and determination shall be made by
each respective Fund and shall be confirmed in writing, including certifications
of the computations involved, to the other Fund.
For
purposes of determining the NAV per share of each Fund’s common shares, the fair
value of the securities held by the applicable Fund plus cash or other assets
(including interest, dividends or distributions, accrued but not yet received
and the value of any net deferred tax assets computed in accordance with GAAP)
minus (i) all of the Fund’s liabilities (including accrued expenses and any net
deferred tax liabilities), (ii) accrued and unpaid interest payments on any
outstanding indebtedness, (iii) the aggregate principal amount of any
outstanding indebtedness, (iv) any distributions payable on the Fund’s common
stock, and (v) each Fund’s share of the Reorganization costs as described in
Section 5, shall be divided by the total number of TGO Common Shares or TYN
Common Shares, respectively, outstanding at such time.
TYN shall
issue to TGO a book entry receipt for TYN Common Shares. TGO shall
then distribute a number of TYN Common Shares to the record holders of TGO
Common Shares equal to the summation of the Exchange Rate times the number of
TGO Common Shares held by each respective TGO stockholder on such record date,
rounded down to the nearest whole number for each respective TGO
stockholder. Such shares will be distributed through a mandatory
corporate action (CUSIP swing from TGO CUSIP(s) to the TYN CUSIP).
No
fractional TYN Common Shares will be issued to TGO. In lieu thereof,
TGO will receive cash from TYN in an amount equal to the NAV (less
Reorganization costs allocable to TGO) of the aggregated fractional TYN Common
Shares that such TGO stockholders would otherwise have received. TGO
will then distribute such cash to TGO stockholders of record in an amount equal
to the net asset value of the fractional TYN Common Shares that the TGO
stockholders would otherwise have received in the Reorganization.
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5.
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PAYMENT
OF EXPENSES.
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TGO and
TYN will bear expenses incurred in connection with the Reorganization, including
but not limited to costs related to the preparation and distribution of
materials distributed to each Fund’s Board of Directors, expenses incurred in
connection with the preparation of the Reorganization Agreement and the
registration statement on Form N-14, the printing and distribution of the joint
proxy statement/prospectus and semi-annual reports, SEC and state securities
commission filing fees and legal and audit fees in connection with the
Reorganization, legal fees incurred preparing each Fund’s Board materials,
attending each Fund’s Board meetings and preparing the minutes, auditing fees
associated with each Fund’s financial statements, stock exchange fees, transfer
agency fees, rating agency fees, portfolio transfer taxes (if any) and any
similar expenses incurred in connection with the Reorganization, which will be
borne directly by the respective Fund incurring the expense or allocated among
the Funds based upon some reasonable methodology to be reviewed by each Fund’s
Board of Directors.
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6.
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COVENANTS
OF THE FUNDS.
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(a) Each Fund
covenants to operate its business as presently conducted between the date hereof
and the Closing Date.
(b) TGO
agrees that as soon as practicable following the consummation of the
Reorganization, it will dissolve in accordance with the laws of the State of
Maryland and any other applicable law, it will not make any distributions of any
TYN Common Shares other than to its stockholders and without first paying or
adequately
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providing
for the payment of all of its respective liabilities not assumed by TYN, if any,
and on and after the Closing Date it shall not conduct any business except in
connection with its termination.
(c) TGO
undertakes that if the Reorganization is consummated, it will file an
application pursuant to Section 8(f) of the 1940 Act for an order declaring that
TGO has ceased to be a registered investment company.
(d) TYN will
file the registration statement on Form N-14 with the Securities and Exchange
Commission (the “SEC”) and will use
its commercially reasonable efforts to provide that the registration statement
on Form N-14 becomes effective as promptly as practicable. Each Fund agrees to
cooperate fully with the other, and each will furnish to the other the
information relating to itself to be set forth in the registration statement on
Form N-14 as required by the 1933 Act, the 1934 Act the 1940 Act, and the rules
and regulations thereunder and the state securities laws.
(e) TGO has
no plan or intention to sell or otherwise dispose of the TGO Investments, except
for dispositions made in the ordinary course of business.
(f) Each of
the Funds agrees that by the Closing Date all of its federal and other tax
returns and reports required to be filed on or before such date shall have been
filed and all taxes shown as due on said returns either have been paid or
adequate liability reserves have been provided for the payment of such
taxes.
The
intention of the parties is that the transaction contemplated by this Agreement
will qualify as a reorganization within the meaning of Section 368(a) of the
Code. Neither TYN nor TGO shall take any action or cause any action to be taken
(including, without limitation, the filing of any tax return) that is
inconsistent with such treatment or results in the failure of the transaction to
qualify as a reorganization within the meaning of Section 368(a) of the Code. At
or prior to the Closing Date, TYN and TGO will take such action, or cause such
action to be taken, as is reasonably necessary to enable Husch Xxxxxxxxx Xxxxxxx
LLP (“HBS”),
counsel to the Funds, to render the tax opinion required herein (including,
without limitation, each party’s execution of representations reasonably
requested by and addressed to HBS).
In
connection with this covenant, the Funds agree to cooperate with each other in
filing any tax return, amended return or claim for refund, determining a
liability for taxes or a right to a refund of taxes or participating in or
conducting any audit or other proceeding in respect of taxes. TYN agrees to
retain for a period of ten years following the Closing Date all returns,
schedules and work papers and all material records or other documents relating
to tax matters of TGO for each of such Fund’s taxable period first ending after
the Closing Date and for all prior taxable periods.
After the
Closing Date, TGO shall prepare, or cause its agents to prepare, any federal,
state or local tax returns required to be filed by such fund with respect to its
final taxable year ending with its complete dissolution following the
Reorganization and for any prior periods or taxable years and further shall
cause such tax returns to be duly filed with the appropriate taxing authorities.
Notwithstanding the aforementioned provisions of this subsection, any expenses
incurred by TGO (other than for payment of taxes) in connection with the
preparation and filing of said tax returns after the Closing Date shall be borne
by such Fund to the extent such expenses have been accrued by such Fund in the
ordinary course without regard to the Reorganization; any excess expenses shall
be borne by the Adviser or an affiliate thereof.
(g) Each Fund
agrees to mail to its stockholders of record entitled to vote at the special
meeting of stockholders at which action is to be considered regarding this
Agreement, in sufficient time to comply with requirements as to notice thereof,
the joint proxy statement/prospectus which complies in all material respects
with the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act,
and the rules and regulations, respectively, thereunder.
(h) Following
the consummation of the Reorganization, TYN will continue its business as a
non-diversified, closed-end management investment company registered under the
1940 Act.
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7. CLOSING
DATE.
(a) Delivery
of the assets and liabilities of TGO to be transferred and TYN Common Shares to
be issued as provided in this Agreement, shall be made at such place and time as
the Funds shall mutually agree on the next full business day following the
Valuation Time, or at such other time and date agreed to by the Funds, the date
and time upon which such delivery is to take place being referred to herein as
the “Closing
Date.” To the extent that any TGO Investments, for any reason, are not
transferable on the Closing Date, TGO shall cause such TGO Investments to be
transferred to TYN’s account with its custodian at the earliest practicable date
thereafter.
(b) TGO will
deliver to TYN on the Closing Date confirmation or other adequate evidence as to
the tax basis of the TGO Investments delivered to TYN hereunder.
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8.
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CONDITIONS
OF TGO.
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The
obligations of TGO hereunder shall be subject to the following
conditions:
(a) That this
Agreement shall have been adopted, and the Reorganization shall have been
approved, by the affirmative vote of the members of the Board of Directors of
TGO, including a majority of the Fund's Independent Directors, and by the
affirmative vote of the TGO stockholders entitled to cast a majority of all
votes entitled to be cast on the matter; and that TYN shall have delivered to
TGO a copy of the resolution approving this Agreement adopted by the Board of
Directors of TYN, and a certificate setting forth the vote of holders of TYN
Common Shares approving the issuance of additional TYN Common Shares, each
certified by its Secretary.
(b) That TGO
shall have received from TYN a Statement of Assets and Liabilities, with fair
values determined as provided in Section 4 of this Agreement, together with a
Schedule of Investments, all as of the Valuation Time, certified on TYN’s behalf
by any authorized officer of TYN, and a certificate signed by any authorized
officer of TYN, dated as of the Closing Date, certifying that as of the
Valuation Time and as of the Closing Date there has been no material adverse
change in the financial position of TYN from the information set forth in the
Joint Proxy Statement/Prospectus, other than changes in its portfolio securities
since that date or changes in the market value of its portfolio
securities.
(c) That TYN
shall have furnished to TGO a certificate signed by any authorized officer of
TYN, dated as of the Closing Date, certifying that, as of the Valuation Time and
as of the Closing Date, all representations and warranties of TYN made in this
Agreement are true and correct in all material respects with the same effect as
if made at and as of such dates, and that TYN has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied at or prior to each of such dates.
(d) That
there shall not be any material litigation pending with respect to the matters
contemplated by this Agreement.
(e) TGO shall
have received the opinion of HBS or Maryland counsel, acting as special counsel
for TYN, dated as of the Closing Date, addressed to TGO, substantially in the
form and to the effect that:
(i) TYN is
validly existing and in good standing under the laws of the State of
Maryland;
(ii) TYN is
registered as a closed-end management investment company under the 1940
Act;
(iii) TYN has
the power and authority to execute, deliver and perform all of its obligations
under this Agreement under the laws of the State of Maryland, the execution and
delivery and the consummation by TYN of the transactions contemplated hereby
have been duly authorized by all requisite action of TYN under the laws of the
State of Maryland, and this Agreement has been duly executed and delivered by
TYN under the laws of the State of Maryland;
(iv) this
Agreement constitutes a valid and binding obligation of TYN (assuming this
Agreement is a valid and binding obligation of the other party
hereto);
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(v) the
execution and delivery by TYN of this Agreement and the performance by TYN of
its obligations under this Agreement do not conflict with the Articles of
Incorporation or the Bylaws of TYN;
(vi) neither
the execution, delivery or performance by TYN of this Agreement nor the
compliance by TYN with the terms and provisions hereof contravene any provision
of the laws of the State of Maryland or the federal laws of the United
States;
(vii) no
governmental approval, which has not been obtained or taken and is not in full
force and effect, is required to authorize, or is required in connection with,
the execution or delivery of this Agreement by TYN or the enforceability of this
Agreement against TYN; and
(viii) the TYN
Common Shares have each been duly authorized and, upon issuance thereof in
accordance with this Agreement, each will be validly issued, fully paid and
nonassessable.
(f) That TGO
shall have obtained an opinion from HBS, counsel for TYN, dated as of the
Closing Date, addressed to TGO, that the consummation of the transactions set
forth in this Agreement comply with the requirements of a reorganization as
described in Section 368(a) of the Code.
(g) That all
proceedings taken by each of TYN and its counsel in connection with the
Reorganization and all documents incidental thereto shall be satisfactory in
form and substance to the others.
(h) That the
N-14 Registration Statement shall have become effective under the 1933 Act, and
no stop order suspending such effectiveness shall have been instituted or, to
the knowledge of TYN, be contemplated by the SEC.
(i) That the
Investment Adviser shall have agreed to a management fee waiver of 0.10% and
0.05% of average monthly managed assets of the combined Fund for the 2010 and
2011 calendar years, respectively, which would apply if the Reorganization
closes.
(j) That the
Board of Directors of TGO, including a majority of the Fund’s Independent
Directors, believes as of the Closing Date that TYN has the financial capacity
to consummate the Reorganization and sufficient liquidity to pay any outstanding
balance on the TGO line of credit and remain in compliance with the statutory
and contractual leverage limitations by which TYN is bound.
(k) That the
TYN Common Shares to be issued to TGO in the Reorganization shall have been
approved for listing on the New York Stock Exchange.
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9.
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CONDITIONS
OF TYN.
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The
obligations of TYN hereunder shall be subject to the following
conditions:
(a) That this
Agreement shall have been adopted, and the Reorganization shall have been
approved, by the affirmative vote of the members of the Board of Directors of
TYN, including a majority of the Fund's Independent Directors, and that the
issuance of additional TYN Common Shares shall have been approved by the
affirmative vote of a majority of the votes cast, provided that total votes cast
on the proposal represented over 50% of all securities entitled to vote on the
proposal; and TGO shall have delivered to TYN a copy of the resolution approving
this Agreement adopted by TGO’s Board of Directors, and a certificate setting
forth the vote of the holders of TGO Common Shares approving the Reorganization,
each certified by its Secretary.
(b) That TGO
shall have furnished to TYN a Statement of Assets and Liabilities, with fair
values determined as provided in Section 4 of this Agreement, together with a
Schedule of Investments with their respective dates of acquisition and tax
basis, all as of the Valuation Time, certified on TGO’s behalf by any authorized
officer of TGO, and a certificate signed by any authorized officer of TGO, dated
as of the Closing Date, certifying that as of the Valuation Time and as of the
Closing Date there has been no material adverse
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(c) That TGO
shall have furnished to TYN a certificate signed by any authorized officer of
TGO, dated the Closing Date, certifying that as of the Valuation Time and as of
the Closing Date all representations and warranties of TGO made in this
Agreement are true and correct in all material respects with the same effect as
if made at and as of such dates and TGO has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied at
or prior to such dates.
(d) That
there shall not be any material litigation pending with respect to the matters
contemplated by this Agreement.
(e) That TYN
shall have received the opinion of HBS or Maryland counsel acting as special
counsel for TGO, dated as of the Closing Date, addressed to TYN, substantially
in the form and to the effect that:
(i) TGO is
validly existing and in good standing under the laws of the State of
Maryland;
(ii) TGO is
registered as a closed-end management investment company under the 1940
Act;
(iii) TGO has
the power and authority to execute, deliver and perform all of its obligations
under this Agreement under the laws of the State of Maryland, the execution and
delivery and the consummation by TGO of the transactions contemplated hereby
have been duly authorized by all requisite action of TGO under the laws of the
State of Maryland, and this Agreement has been duly executed and delivered by
TGO under the laws of the State of Maryland;
(iv) this
Agreement constitutes a valid and binding obligation of TGO (assuming this
Agreement is a valid and binding obligation of the other party
hereto);
(v) the
execution and delivery by TGO of this Agreement and the performance by TGO of
its obligations under this Agreement do not conflict with the Articles of
Incorporation or the Bylaws of TGO;
(vi) neither
the execution, delivery or performance by TGO of this Agreement nor the
compliance by TGO with the terms and provisions hereof contravene any provision
of the laws of the State of Maryland or the federal laws of the United States;
and
(vii) no
governmental approval, which has not been obtained or taken and is not in full
force and effect, is required to authorize, or is required in connection with,
the execution or delivery of this Agreement by TGO or the enforceability of this
Agreement against TGO.
(f) That TYN
shall have obtained an opinion from HBS, counsel for TGO, dated as of the
Closing Date, addressed to TYN, that the consummation of the transactions set
forth in this Agreement comply with the requirements of a reorganization as
described in Section 368(a) of the Code.
(g) That all
proceedings taken by TGO and its counsel in connection with the Reorganization
and all documents incidental thereto shall be satisfactory in form and substance
to TYN.
(h) That the
N-14 Registration Statement shall have become effective under the 1933 Act and
no stop order suspending such effectiveness shall have been instituted or, to
the knowledge of TGO, be contemplated by the SEC.
(i) That the
Investment Adviser shall have agreed to a management fee waiver of 0.10% and
0.05% of average monthly managed assets of the combined fund for the 2010 and
2011 calendar years, respectively, which would apply if the Reorganization
closes.
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(j) That the
Board of Directors of TYN, including a majority of the Fund’s Independent
Directors, believes as of the Closing Date that TYN will satisfy the conditions
set forth in Section 8(j).
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10.
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TERMINATION,
POSTPONEMENT AND WAIVERS.
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(a) Notwithstanding
anything contained in this Agreement to the contrary, this Agreement may be
terminated and the Reorganization abandoned at any time (whether before or after
adoption thereof by the stockholders of either of the Funds) prior to the
Closing Date, or the Closing Date may be postponed, (i) by mutual consent of the
Boards of Directors of the Funds, (ii) by the Board of Directors of TGO if any
condition of TGO’s obligations set forth in Section 8 of this Agreement has not
been fulfilled or waived by such Board of Directors, or (iii) by the Board of
Directors of TYN if any condition of TYN’s obligations set forth in Section 9 of
this Agreement has not been fulfilled or waived by such Board of
Directors.
(b) If the
transactions contemplated by this Agreement have not been consummated by
December 31, 2009, this Agreement automatically shall terminate on that date,
unless a later date is mutually agreed to by the Boards of Directors of the
Funds.
(c) In the
event of termination of this Agreement pursuant to the provisions hereof, the
same shall become void and have no further effect, and there shall not be any
liability on the part of any Fund or persons who are their directors, trustees,
officers, agents or stockholders in respect of this Agreement.
(d) At any
time prior to the Closing Date, any of the terms or conditions of this Agreement
may be waived by the Board of Directors of either Fund (whichever is entitled to
the benefit thereof), if, in the judgment of such Board of Directors after
consultation with its counsel, such action or waiver will not have a material
adverse effect on the benefits intended under this Agreement to the stockholders
of their respective fund, on behalf of which such action is taken.
(e) The
respective representations and warranties contained in Sections 1 and 2 of this
Agreement shall expire with, and be terminated by, the consummation of the
Reorganization, and neither Fund nor any of its officers, trustees, agents or
stockholders shall have any liability with respect to such representations or
warranties after the Closing Date. This provision shall not protect any officer,
trustee, agent or stockholder of either Fund against any liability to the entity
for which that officer, trustee, agent or stockholder so acts or to its
stockholders, to which that officer, trustee, agent or stockholder otherwise
would be subject by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties in the conduct of such office.
(f) If any
order or orders of the SEC with respect to this Agreement shall be issued prior
to the Closing Date and shall impose any terms or conditions which are
determined by action of the Boards of Directors of the Funds to be acceptable,
such terms and conditions shall be binding as if a part of this Agreement
without further vote or approval of the stockholders of the Funds unless such
terms and conditions shall result in a change in the method of computing the
number of TYN Common Shares to be issued to TGO, as applicable, in which event,
unless such terms and conditions shall have been included in the proxy
solicitation materials furnished to the stockholders of the Funds prior to the
meetings at which the Reorganization shall have been approved, this Agreement
shall not be consummated and shall terminate unless the Funds promptly shall
call a special meeting of stockholders at which such conditions so imposed shall
be submitted for approval.
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11. INDEMNIFICATION.
(a) Each
party (an “Indemnitor”) shall
indemnify and hold the other and its officers, trustees, agents and persons
controlled by or controlling any of them (each, an “Indemnified Party”)
harmless from and against any and all losses, damages, liabilities, claims,
demands, judgments, settlements, deficiencies, taxes, assessments, charges,
costs and expenses of any nature whatsoever (including reasonable attorneys’
fees), including amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees reasonably incurred by such the
Indemnified Party in connection with the defense or disposition of any claim,
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which such the Indemnified Party may be
or may have been involved as a party or otherwise or with which such the
Indemnified Party may be or may have been threatened (collectively, the “Losses”) arising out
of or related to any claim of a breach of any representation, warranty or
covenant made herein by the Indemnitor; provided, however, that no Indemnified
Party shall be indemnified hereunder against any Losses arising directly from
such the Indemnified Party’s (i) willful misfeasance, (ii) bad faith, (iii)
gross negligence or (iv) reckless disregard of the duties involved in the
conduct of such Indemnified Party’s position.
(b) The
Indemnified Party shall use its best efforts to minimize any liabilities,
damages, deficiencies, claims, judgments, assessments, costs and expenses in
respect of which indemnity may be sought hereunder. The Indemnified Party shall
give written notice to Indemnitor within the earlier of ten days of receipt of
written notice to the Indemnified Party or 30 days from discovery by the
Indemnified Party of any matters which may give rise to a claim for
indemnification or reimbursement under this Agreement. The failure to give such
notice shall not affect the right of the Indemnified Party to indemnity
hereunder unless such failure has materially and adversely affected the rights
of the Indemnitor; provided that in any event such notice shall have been given
prior to the expiration of the Survival Period. At any time after ten days from
the giving of such notice, the Indemnified Party may, at its option, resist,
settle or otherwise compromise, or pay such claim unless it shall have received
notice from the Indemnitor that the Indemnitor intends, at the Indemnitor’s sole
cost and expense, to assume the defense of any such matter, in which case the
Indemnified Party shall have the right, at no cost or expense to the Indemnitor,
to participate in such defense. If the Indemnitor does not assume the defense of
such matter, and in any event until the Indemnitor states in writing that it
will assume the defense, the Indemnitor shall pay all costs of the Indemnified
Party arising out of the defense until the defense is assumed; provided,
however, that the Indemnified Party shall consult with the Indemnitor and obtain
indemnitor’s prior written consent to any payment or settlement of any such
claim. The Indemnitor shall keep the Indemnified Party fully apprised at all
times as to the status of the defense. If the Indemnitor does not assume the
defense, the Indemnified Party shall keep the Indemnitor apprised at all times
as to the status of the defense. Following indemnification as provided for
hereunder, the Indemnitor shall be subrogated to all rights of the Indemnified
Party with respect to all third parties, firms or corporations relating to the
matter for which indemnification has been made.
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12.
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OTHER
MATTERS.
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(a) All
covenants, agreements, representations and warranties made under this Agreement
and any certificates delivered pursuant to this Agreement shall be deemed to
have been material and relied upon by each of the parties, notwithstanding any
investigation made by them or on their behalf.
(b) All
notices hereunder shall be sufficiently given for all purposes hereunder if in
writing and delivered personally or sent by registered mail or certified mail,
postage prepaid. Notice to TGO shall be addressed to TGO c/o Tortoise Capital
Advisors, LLC, 00000 Xxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxx 00000,
Attention: Xxxxxx Xxxxxx, Secretary of TGO, or at such other address
as TGO may designate by written notice to TYN. Notice to TYN shall be addressed
to TYN c/o Tortoise Capital Advisors, LLC, 00000 Xxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxx 00000, Attention: Xxxxxx Xxxxxx, Secretary of TYN, or at such other
address and to the attention of such other person as TYN may designate by
written notice to TGO. Any notice shall be deemed to have been served or given
as of the date such notice is delivered personally or mailed.
(c) This
Agreement supersedes all previous correspondence and oral communications between
the parties regarding the Reorganization, constitutes the only understanding
with respect to the Reorganization, may not be changed except by a letter of
agreement signed by each party and shall be governed by and construed
in
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(d) It is
expressly agreed that the obligations of the Funds hereunder shall not be
binding upon any of their respective Directors, stockholders, nominees,
officers, agents, or employees personally, but shall bind only the property of
the respective Fund. The execution and delivery of this Agreement has been
authorized by the Directors of each Fund and signed by authorized officers of
each Fund, acting as such, and neither such authorization by such Directors, nor
such execution and delivery by such officers shall be deemed to have been made
by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of each Fund.
This
Agreement may be executed in any number of counterparts, each of which, when
executed and delivered, shall be deemed to be an original but all such
counterparts together shall constitute but one instrument.
IN
WITNESS WHEREOF, the parties have hereunto caused this Agreement to be executed
and delivered by their duly authorized officers as of the day and year first
written above.
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TORTOISE
GAS AND OIL CORPORATION
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[Name]
_____________________
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[Title]
______________________
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[Name]
_____________________
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[Title]
______________________
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