CARLYLE CREDIT INCOME FUND Common Shares EQUITY DISTRIBUTION AGREEMENT
Exhibit 2(h)(3)
Common Shares
October 4, 2023
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ Floor
▇. ▇▇▇▇▇ Securities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
Dear Ladies and Gentlemen:
Carlyle Credit Income Fund, a Delaware statutory trust (the “Fund”) and Carlyle Global Credit Investment Management L.L.C., a Delaware limited liability company (the “Advisor”), confirm their respective agreements (this “Agreement”) with and the appointment of Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. (“Ladenburg”), ▇. ▇▇▇▇▇ Securities, Inc. (“▇. ▇▇▇▇▇”) and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. (“▇▇▇▇▇▇▇▇▇▇▇” and, together with Ladenburg and ▇. ▇▇▇▇▇, the “Placement Agents”) to act as placement agents and/or principals in connection with the proposed issuance and sale of the Fund’s shares of beneficial interest (the “Common Shares”) from time to time during the term of this Agreement having an aggregate offering price of up to $75,000,000 (the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth herein regarding the amount of Common Shares to be issued and sold under this Agreement, including any limitations on the amount of securities sold by the Fund during any period under the Securities Act Regulations (as defined below) or such other rules and regulations as may be applicable to the Fund, including certain Securities and Exchange Commission (the “Commission”) rules that prohibit the Fund from selling securities in a public primary offering with a value exceeding more than one-third of its public float in any 12-month period so long as its public float remains below $75.0 million, shall be the sole responsibility of the Fund, and the Placement Agents shall have no obligation in connection with such compliance. The issuance and sale of the Common Shares through the Placement Agents will be effected pursuant to the Registration Statement (as defined below) filed by the Fund and declared effective by the Commission, although nothing in this Agreement shall be construed as requiring the Fund to use the Registration Statement to issue the Common Shares.
The Fund has prepared and filed with the Commission under the Securities Act of 1933, as amended (the “Securities Act”), the rules and regulations of the Commission thereunder (the “Securities Act Regulations”) and the Investment Company Act of 1940, as amended, and the rules and regulations thereunder (collectively, the “1940 Act”) a registration statement on Form N-2, listed on Schedule 1 hereto, relating to, among other securities, the Common Shares. The registration statement as amended, including the exhibits and schedules thereto, at the time it became effective, including the information, if any, deemed
to be part of the registration statement at the time of its effectiveness pursuant to Rule 430B of the Securities Act Regulations, and all documents incorporated or deemed to be incorporated therein by reference, is hereinafter referred to as the “Registration Statement.” The base prospectus included in the Registration Statement (including the information if any, deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430B under the Securities Act Regulations), in the form in which it was distributed, is hereinafter referred to as the “Base Prospectus.” The prospectus supplement to be filed with the Commission pursuant to Rule 424 of the Securities Act Regulations and all documents incorporated or deemed to be incorporated therein by reference and to be used to confirm sales is hereinafter referred to, together with the Base Prospectus, as the “Prospectus.” If the Fund has filed an abbreviated registration statement pursuant to Rule 462(b) of the Securities Act Regulations (a “Rule 462(b) Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462(b) Registration Statement. The Fund may amend Schedule 1 from time to time by providing notice to the Placement Agents pursuant to Section 14 of this Agreement.
On May 3, 2011, the Fund has filed a notification on Form N-8A (the “Notification”) of registration of the Fund as an investment company under the 1940 Act. On May 23, 2019, the Fund filed with the Commission a Form 8-A to register its Common Shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The Fund has entered into an investment advisory agreement, dated as of July 14, 2023, with the Advisor, as temporarily modified by: (i) that certain Expense Limitation Agreement, dated as of July 14, 2023, by and between the Fund and the Advisor, and (ii) that certain Fee Waiver Agreement, dated as of July 14, 2023, by and between the Fund and the Advisor (collectively, the “Investment Advisory Agreement” and, together with this Agreement, the “Fund Agreements”).
The Fund and each Placement Agent agree as follows:
SECTION 1. Placements.
Each time that the Fund wishes to issue and sell the Common Shares hereunder (each, a “Placement”), it will notify some or all of the several Placement Agents by e-mail notice (or other method mutually agreed to in writing by the parties) containing the parameters in accordance with which the Fund desires the Common Shares to be sold, which shall at a minimum include the number of Common Shares to be issued and sold (the “Placement Securities”), the time period during which sales are requested to be made, any limitation on the number of Common Shares that may be sold in any one day and any minimum price below which sales may not be made (which minimum price shall not be less than the Fund’s then current net asset value per share) (a “Placement Notice”), a form of which containing such minimum sales parameters is attached hereto as Exhibit A; provided, however, the Fund agrees that any offer to sell, any solicitation of an offer to buy, or any sales of Common Shares shall be effected by or through only one Placement Agent on any single given day, and the Fund shall in no event request that a Placement Agent sell Common Shares on the same day as another Placement Agent. The Placement Notice shall originate from any of the individuals from the Fund set forth on Exhibit B (with a copy to each of the other individuals from the Fund listed on such schedule), and shall be addressed to each of the individuals from the Applicable Placement Agent (as defined below) set forth on Exhibit B, as such Exhibit B may be amended from time to time.
If the Applicable Placement Agent wishes to accept such proposed terms included in the Placement Notice (which it may decline to do so for any reason in its sole discretion) or, following discussion with the Fund, wishes to accept amended terms, the Applicable Placement Agent, will, prior to 4:30 p.m. (New York City Time) on the Trading Day (as defined below) following the Trading Day on which such Placement Notice is delivered to the Applicable Placement Agent, issue to the Fund a notice by email (or other method
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mutually agreed to in writing by the parties), addressed to all of the individuals from the Fund and the Applicable Placement Agent set forth on Exhibit B, setting forth the terms that the Applicable Placement Agent is willing to accept. Where the terms provided in the Placement Notice are amended as provided for in the immediately preceding sentence, such terms will not be binding on the Fund or the Applicable Placement Agent until the Fund delivers to the Applicable Placement Agent an acceptance by email (or other method mutually agreed to in writing by the parties) of all of the terms of such Placement Notice, as amended (the “Acceptance”), which email shall be addressed to all of the individuals from the Fund and the Applicable Placement Agent set forth on Exhibit B. The Placement Notice (as amended by the corresponding Acceptance, if applicable) shall be effective upon receipt by the Fund of the Applicable Placement Agent’s acceptance of the terms of the Placement Notice on behalf of the Applicable Placement Agent, or upon receipt by the Applicable Placement Agent of the Fund’s Acceptance, as the case may be, unless and until (i) the entire amount of the Placement Securities has been sold, (ii) the Fund or the Applicable Placement Agent terminates the Placement Notice in accordance with Section 3 below, (iii) the Fund issues a subsequent Placement Notice with parameters superseding those on the earlier dated Placement Notice, (iv) this Agreement has been terminated under the provisions of Section 10 or (v) either party shall have suspended the sale of the Placement Securities in accordance with Section 3 below. The amount of any commission, discount or other compensation to be paid by the Fund to the Applicable Placement Agent in connection with the sale of the Placement Securities shall be calculated in accordance with the terms set forth in Exhibit C. It is expressly acknowledged and agreed that neither the Fund nor the Placement Agents will have any obligation whatsoever with respect to a Placement or any Placement Securities unless and until the Fund delivers a Placement Notice to the Applicable Placement Agent and either (i) the Applicable Placement Agent accepts the terms of such Placement Notice or (ii) where the terms of such Placement Notice are amended, the Fund accepts such amended terms by means of an Acceptance pursuant to the terms set forth above, and then only upon the terms specified in the Placement Notice (as amended by the corresponding Acceptance, if applicable) and herein (and after such acceptance by either the Placement Agent or the Fund, any Placement Agent bound to such terms is referred to as an “Applicable Placement Agent”). In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice (as amended by the corresponding Acceptance, if applicable), the terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable) will control. For the purposes hereof, “Business Day” means any day other than a Saturday, Sunday or a day on which the New York Stock Exchange is closed or on which commercial banks located in New York City are required or authorized by law to close.
SECTION 2. Sale of Placement Securities by the Placement Agents.
Subject to the provisions of Section 7(a), the Applicable Placement Agent, for the period specified in the Placement Notice (as amended by the corresponding Acceptance, if applicable), will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the Placement Securities up to the amount specified, and otherwise in accordance with the terms of such Placement Notice (as amended by the corresponding Acceptance, if applicable). The Applicable Placement Agent will provide written confirmation to the Fund no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Securities hereunder setting forth the number of Placement Securities sold on such day, the compensation payable by the Fund to the Applicable Placement Agent pursuant to Section 1 with respect to such sales, and the Net Proceeds (as defined below) payable to the Fund, with an itemization of the deductions made by the Applicable Placement Agent (as set forth in Section 7(b)) from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable), the Applicable Placement Agent may sell Placement Securities by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, including without limitation sales made directly on the New York Stock Exchange, on any other existing trading market for the Common Shares or to or through a market maker. Subject to the terms of the Placement Notice (as amended by the
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corresponding Acceptance, if applicable), the Applicable Placement Agent may also sell Placement Securities by any other method permitted by law, including but not limited to in privately negotiated transactions. For the purposes hereof, “Trading Day” means any day on which Common Shares is purchased and sold on the principal market on which the Common Shares is listed or quoted.
SECTION 3. Suspension of Sales. The Fund or the Applicable Placement Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Exhibit B, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Exhibit B), suspend or terminate any sale of Placement Securities; provided, however, that such suspension or termination shall not affect or impair either party’s obligations with respect to any Placement Securities sold hereunder prior to the receipt of such notice. Each of the parties agrees that no such notice under this Section 3 shall be effective against the other unless it is made to one of the individuals named on Exhibit B hereto, as such Exhibit may be amended from time to time.
SECTION 4. Representations and Warranties of the Fund and the Advisor. The Fund represents and warrants to and agrees with, and the Advisor represents and warrants to and agrees with, each Placement Agent as of the date hereof and as of each Representation Date (as defined below) on which a certificate is required to be delivered pursuant to Section 9(a) of this Agreement, as of the time of each sale of any Common Shares pursuant to this Agreement as agreed by the Fund and each Placement Agent (each, an “Applicable Time”) and as of each Settlement Date (as defined below), as follows:
(a) the Fund has prepared and filed with the Commission the Registration Statement, including the Prospectus, for registration under the Securities Act of the issuance and sale of certain securities, including the Common Shares, from time to time by the Fund. The Fund has prepared and filed with the Commission the Prospectus relating to the Common Shares in accordance with Rule 424 of the Securities Act Regulations;
(b) the Fund has an authorized capitalization as set forth in the Prospectus under the caption “Description of Securities,” at the date indicated;
(c) all of the issued and outstanding shares of beneficial interests of the Fund have been duly and validly authorized and issued and are fully paid and non-assessable, and have not been issued in violation of or subject to any preemptive right, resale right, right of first refusal or other similar right of shareholders arising by operation of law, under the declaration of trust, certificate of incorporation, bylaws, certificate of designation or other applicable governing document (collectively, the “Charter Documents”) of the Fund, under any agreement to which the Fund is a party or otherwise; except as disclosed in the Prospectus, there are no outstanding (x) securities or obligations of the Fund convertible into or exchangeable for any shares of beneficial interests of the Fund, (y) warrants, rights or options to subscribe for or purchase from the Fund any such shares of beneficial interests, partnership interest, or membership interest or any such convertible or exchangeable securities or obligations, or (z) obligations of the Fund to issue or sell any shares of beneficial interests, partnership interest, or membership interest, any such convertible or exchangeable securities or obligation, or any such warrants, rights or options;
(d) the Fund is a Delaware statutory trust duly organized, validly existing and in good standing under the laws of the State of Delaware, with requisite corporate power and authority to own, lease or operate its properties and to conduct its business as described in the Registration Statement and the Prospectus and to execute and deliver and perform its obligations under the Fund Agreements and to consummate the transactions contemplated therein;
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(e) the Fund is duly qualified or licensed by, and is in good standing in, each jurisdiction in which it conducts its business, or in which it owns or leases real property or otherwise maintains an office, and in which such qualification or licensing is necessary and in which the failure, individually or in the aggregate, to be so qualified or licensed would reasonably be expected to have a material adverse effect on the assets, business, operations, earnings, properties or condition (financial or otherwise), present or prospective, of the Fund (any such effect or change, where the context so requires, is hereinafter called a “Material Adverse Effect” or a “Material Adverse Change”); other than as disclosed in the Prospectus, the Fund does not own, directly or indirectly, any shares of beneficial interests or other equity securities of any other corporation or any ownership interest in any partnership, joint venture or other association;
(f) the Fund, subject to the filing of the Prospectus under Rule 424 of the Securities Act Regulations, has taken all required action under the Securities Act and the 1940 Act to consummate the transactions contemplated by this Agreement;
(g) the Fund is in compliance in all material respects with all applicable laws, rules, regulations, orders, decrees and judgments, including those relating to transactions with affiliates and including certain Commission rules that prohibit the Fund from selling securities in a public primary offering with a value exceeding more than one-third of its public float in any 12-month period so long as its public float remains below $75.0 million;
(h) the Fund is not in breach of, or in default under (nor has any event occurred which with notice, lapse of time, or both would constitute a breach of, or default under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or part of such indebtedness under), its Charter Documents or in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, license, indenture, mortgage, deed of trust, bank loan or credit agreement or other agreement or instrument to which the Fund is a party or by which it or its properties is bound or affected, except for such breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(i) the execution, delivery and performance by the Fund of this Agreement, the transactions contemplated by this Agreement (including, without limitation, the issuance and sale of the Common Shares), the delivery of the Common Shares by the Fund, the Fund’s use of the proceeds from the sale of the Common Shares as described in the Registration Statement and the Prospectus, the consummation by the Fund of the transactions contemplated by the Fund Agreements, and compliance by the Fund with the terms and provisions hereunder and thereunder, will not: (x) conflict with, or result in any breach of, or constitute a default under (or constitute any event which with notice, lapse of time, or both would constitute a breach of, or default under), (A) any provision of the Charter Documents of the Fund, (B) any provision of any contract, license, indenture, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which the Fund is a party or by which any of them or their respective properties may be bound or affected, or (C) any federal, state, local or foreign law, regulation, rule, decree, judgment or order (each a “Legal Requirement”) issued by the U.S. government or any state, local or foreign government, court, administrative agency or commission or other governmental agency, authority or instrumentality, domestic or foreign, of competent jurisdiction (each a “Governmental Authority”) applicable to the Fund, except in the case of clauses (B) or (C) for such conflicts, breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or (y) result in the creation or imposition of any lien, charge, claim or encumbrance upon any material property or asset of the Fund;
(j) each of the Fund Agreements has been duly authorized, executed and delivered by the Fund and constitutes legal, valid and binding agreements of the Fund enforceable in accordance with their respective terms, except, in each case, as enforcement may be limited by bankruptcy, insolvency,
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reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general equitable principles, and except to the extent that the indemnification and contribution provisions of Section 11 hereof or thereof may be limited by federal or state securities laws and public policy considerations in respect thereof;
(k) each of the Fund Agreements complies in all material respects with all applicable provisions of the 1940 Act, the Investment Advisers Act of 1940, as amended, and the rules and regulations thereunder (collectively, the “Advisers Act”), the Fund’s shareholders have approved the Investment Advisory Agreement as required by Section 15(a) of the 1940 Act and the Fund’s board of trustees has approved the Investment Advisory Agreement as required by Section 15(c) of the 1940 Act. The operations of the Fund, as described in the Prospectus, are, and at all times through the completion of the transactions contemplated hereby, will be, in compliance in all material respects with the provisions of the 1940 Act. The provisions of the Charter Documents and the investment objective, policies and restrictions described in the Prospectus, assuming they are implemented as so described, comply, and at all times through the completion of the transactions contemplated hereby, will comply in all material respects with the applicable requirements of the 1940 Act. The terms of the Investment Advisory Agreement, including compensation terms, comply with the provisions of Sections 15(a) and 15(c) of the 1940 Act and Section 205 of the Advisers Act;
(l) except as disclosed in the Prospectus, no trustee of the Fund is an “interested person” (as defined in the 1940 Act) of the Fund or an “affiliated person” (as defined in the 1940 Act) of the Placement Agents;
(m) no (i) approval, authorization, consent or order of or filing with any Governmental Authority, (ii) authorization, approval, vote or other consent of any holder of securities of the Fund or any creditor of the Fund, or (iii) waiver or consent under any material agreement is required in connection with the Fund’s execution, delivery and performance of each of the Fund Agreements, its consummation of the transactions contemplated by this Agreement (including, without limitation, the issuance and sale of the Common Shares), and its delivery of the Common Shares, other than (A) such as have been obtained, or will have been obtained at the completion of the transactions contemplated hereby, as the case may be, under the Securities Act, the Exchange Act, the 1940 Act, the Advisers Act and the rules and regulations of Financial Industry Regulatory Authority (“FINRA”), (B) such approvals as may be required in connection with the approval of the listing of the Common Shares on the New York Stock Exchange and (C) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Common Shares are being offered by the Placement Agents;
(n) except as disclosed in the Prospectus, the Fund has all necessary licenses, permits, authorizations, accreditations, certifications, consents and approvals and has made all necessary filings required under any Legal Requirement, and has obtained all necessary licenses, permits, authorizations, accreditations, certifications, consents and approvals from other persons required in order to conduct their respective businesses as described in the Prospectus, except to the extent that any failure to have any such licenses, permits, authorizations, accreditations, certifications, consents or approvals to make any such filings or to obtain any such licenses, permits, authorizations, accreditations, certifications, consents or approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; the Fund is not in violation of, or in default under, or has received any notice regarding a possible violation of, default under, or revocation of, any such license, permit, authorization, accreditation, certification, consent or approval or any Legal Requirement applicable to the Fund the effect of which would reasonably be expected to have a Material Adverse Change; and no such license, permit, authorization, accreditation, certification, consent or approval contains a materially burdensome restriction that is not adequately disclosed in the Prospectus;
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(o) the Registration Statement has been declared effective by the Commission and any Rule 462(b) Registration Statement will have become effective upon filing, no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued by the Commission and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Fund, are contemplated or threatened by the Commission, and the Fund has complied to the Commission’s satisfaction with any request on the part of the Commission for additional information;
(p) the Registration Statement as of its effective date and as of the date hereof complied or will comply, and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus, when they become effective or are filed with the Commission, as the case may be, will comply, in all material respects with the requirements of the Securities Act, the Securities Act Regulations and the 1940 Act; the conditions to the use of Form N-2 in connection with the sale of the Placement Securities as contemplated hereby have been satisfied;
(q) the Registration Statement as of its effective date and as of the date hereof did not, does not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus or any amendments thereof or supplements thereto will not, as of its date and as of the respective dates of any amendments or supplements thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that in each case the Fund makes no warranty or representation with respect to any statement contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with the information concerning the Placement Agents and furnished in writing by or on behalf of the Placement Agents to the Fund expressly for use therein (that information being limited to that described in the last sentence of the first paragraph of Section 11(b) hereof);
(r) the Prospectus does not and will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that in each case the Fund makes no warranty or representation with respect to any statement contained in or omitted from the Prospectus, in reliance upon and in conformity with the information concerning the Placement Agents and furnished in writing by or on behalf of the Placement Agents to the Fund expressly for use therein (that information being limited to that described in the last sentence of the first paragraph of Section 11(b) hereof);
(s) the Prospectus delivered or to be delivered to the Placement Agents for use in connection with the sale of the Placement Securities contemplated herein has been and will be identical to the version of such document transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent permitted by Regulation S-T;
(t) there are no actions, suits, arbitrations, claims, proceedings, inquiries or investigations pending or, to the knowledge of the Fund, threatened against the Fund, or any of its properties or, to the Fund’s knowledge, trustees, officers or affiliates, at law or in equity, or before or by any Governmental Authority, which would reasonably be expected to result in a judgment, decree, award or order having a Material Adverse Effect;
(u) the financial statements, including the notes thereto, included in each of the Registration Statement and the Prospectus present fairly the consolidated financial position of the entities to which such financial statements relate (the “Covered Entities”) as of the dates indicated and the consolidated results of operations and changes in financial position and cash flows of the Covered Entities for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting
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principles as applied in the United States and on a consistent basis during the periods involved (except as otherwise noted therein and in accordance with Regulation S-X promulgated by the Commission); the financial statement schedules, if any, included in the Registration Statement and the Prospectus fairly present the information shown therein and have been compiled on a basis consistent with the financial statements included in the Registration Statement and the Prospectus; no other financial statements or supporting schedules are required to be included in the Registration Statement or the Prospectus; and the Fund does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not disclosed in the Registration Statement;
(v) The independent registered public accounting firm whose reports on the financial statements of the Fund are filed with the Commission as part of each of the Registration Statement and the Prospectus, are, and were during the periods covered by such reports, independent public accountants within the meaning of, and as required by, the Securities Act, the Securities Act Regulations and the 1940 Act and are registered with the Public Company Accounting Oversight Board;
(w) subsequent to the respective dates as of which information is given in each of the Registration Statement and the Prospectus, and except as may be otherwise stated in such documents, there has not been (i) any event, circumstance or change that has had, or would reasonably be expected to have, a Material Adverse Effect, (ii) any transaction, other than in the ordinary course of business, which is material to the Fund, contemplated or entered into by the Fund, (iii) any obligation, contingent or otherwise, directly or indirectly incurred by the Fund, other than in the ordinary course of business, which would reasonably be expected to have a Material Adverse Effect, or (iv) any dividend or distribution of any kind declared, paid or made by the Fund on any of its shares of beneficial interests, or any purchase by the Fund of any of its outstanding shares of beneficial interests;
(x) the Fund’s current business operations and investments are in compliance in all material respects with the provisions of the 1940 Act and, after giving effect to the issuance and sale of the Common Shares, will be in compliance in all material respects with the 1940 Act;
(y) the shares of beneficial interests of the Fund, including the Common Shares, conform in all material respects to the statements relating thereto contained in the Registration Statement and the Prospectus;
(z) except as disclosed in the Prospectus, there are no persons with registration or other similar rights to have any equity or debt securities, including securities which are convertible into or exchangeable for equity securities, registered pursuant to the Registration Statement or otherwise registered by the Fund under the Securities Act, except for those registration or similar rights which have been waived with respect to the offering contemplated by this Agreement, all of which registration or similar rights are fairly summarized in the Prospectus;
(aa) the Common Shares to be issued by the Fund pursuant to this Agreement have been duly authorized for issuance, sale and delivery pursuant to this Agreement and, when issued and delivered by the Fund against payment therefor in accordance with the terms of this Agreement, the Common Shares will be duly and validly issued and fully paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, and the issuance, sale and delivery of the Common Shares by the Fund are not subject to any preemptive right, co-sale right, registration right, right of first refusal or other similar right of shareholders arising by operation of law, under the Charter Documents of the Fund, or under any agreement to which the Fund is a party or otherwise;
(bb) the Fund has filed a registration statement on Form 8-A pursuant to Section 12(b) of the Exchange Act to register its Common Shares, and the Form 8-A is effective;
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(cc) the Common Shares have been duly listed on the New York Stock Exchange under the ticker symbol “CCIF.” The Fund has not received any notice that it is not in compliance with the listing or maintenance requirements of the New York Stock Exchange with respect to the Common Shares. The Fund believes that it is, and has no reason to believe that it will not in the foreseeable future continue to be, in material compliance with all such listing and maintenance requirements. Prior to their issuance, the Common Shares will have been approved for listing, subject to official notice of issuance;
(dd) the Fund has not taken, and will not take, directly or indirectly, any action which is designed to or which has constituted, or which might reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Fund to facilitate the issuance, sale or resale of the Common Shares;
(ee) the Fund is not required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act, or the rules and regulations thereunder (the “Exchange Act Regulations”);
(ff) any certificate signed by any officer of the Fund delivered to the Placement Agents or to counsel for the Placement Agents pursuant to or in connection with this Agreement shall be deemed a representation and warranty by the Fund to the Placement Agents as to the matters covered thereby;
(gg) the form of the certificate used to evidence the Common Shares complies in all material respects with all applicable statutory requirements and with any applicable requirements of the Charter Documents of the Fund;
(hh) the Fund has good and marketable title in fee simple to all real property, if any, and good title to all personal property owned by them, in each case free and clear of all liens, security interests, pledges, charges, encumbrances, mortgages and defects, except such as are disclosed in the Registration Statement and the Prospectus or such as do not materially and adversely affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Fund; and any real property and buildings held under lease by the Fund are held under valid, existing and enforceable leases, with such exceptions as are disclosed in the Registration Statement and the Prospectus or are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Fund;
(ii) the descriptions in each of the Registration Statement and the Prospectus of the legal or governmental proceedings, contracts, leases and other legal documents therein described present fairly the information required to be described therein by the Securities Act and the Securities Act Regulations, and there are no legal or governmental proceedings, contracts, leases, or other documents of a character required to be described in each of the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required by the Securities Act or the Securities Act Regulations; all agreements between the Fund and third parties expressly referenced in the Prospectus are legal, valid and binding obligations of the Fund, enforceable against the Fund in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles;
(jj) the statements in the Registration Statement and the Prospectus under the headings “Prospectus Summary – Operating and Regulatory Structure,” “Management and Incentive Fees,” “U.S. Federal Income Tax Matters,” “Description of our Securities” and “Regulation as a Closed-End Management Investment Company” and insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate in all material respects;
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(kk) the expense summary information set forth in the Prospectus in the “Summary of Fees and Expenses” Table has been prepared in accordance with the requirements of Form N-2 and any fee projections or estimates, if applicable, are reasonably based and comply in all material respects with the requirements of Form N-2;
(ll) there are no contracts or documents that are required to be described in the Registration Statement and the Prospectus or to be filed as exhibits to the Registration Statement that have not been so described, filed or incorporated by reference as required. All descriptions of contracts or documents described in the Registration Statement and the Prospectus are accurate and complete in all material respects;
(mm) the Fund owns or possesses adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights, software and design licenses, trade secrets, other intangible property rights and know-how (collectively “Intellectual Property”), as are necessary to entitle the Fund to conduct the Fund’s business described in the Prospectus, except where the failure to own, license or have such right would not reasonably be expected to have a Material Adverse Effect; and the Fund has not received written notice of any infringement of or conflict with (and the Fund does not know of any such infringement of or conflict with) asserted rights of others with respect to any Intellectual Property which would reasonably be expected to have a Material Adverse Effect;
(nn) the Fund has established and maintains disclosure controls and procedures (as such term is defined in Rule 30a-3 under the 1940 Act), which (i) are designed to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to the Fund’s principal executive officer and its principal financial officer by others within those entities to allow timely decisions regarding such disclosures, and (ii) are effective to perform the function for which they were established;
(oo) the Fund maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations and with the investment objectives, policies and restrictions of the Fund and the applicable requirements of the 1940 Act and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States to calculate net asset value, to maintain asset accountability and to maintain compliance in all material respects with books and records requirements under the 1940 Act; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as otherwise disclosed in the Prospectus, to the knowledge of the Fund, there is no (i) significant deficiency or material weakness in the design or operation of its internal controls over financial reporting which are reasonably likely to adversely affect the Fund’s ability to record, process, summarize and report financial information to management and the Fund’s board of trustees, or (ii) fraud, whether or not material, that involves management or other employees who have a significant role in the Fund’s internal control over financial reporting;
(pp) except as otherwise disclosed in the Registration Statement and the Prospectus, the Fund does not have any off-balance sheet transactions, arrangements, obligations (including contingent obligations), or any other similar relationships with unconsolidated entities or other persons;
(qq) the Fund has filed on a timely basis all necessary federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof or has obtained extensions of time from the relevant taxing authority for filing any return that has not been filed (and such extension of time has not expired) and have paid all taxes shown as due thereon except for any tax that is being contested in
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good faith and that is adequately provided for on the respective books of such entities; and no tax deficiency has been asserted against any such entity, nor does any such entity know of any tax deficiency which is likely to be asserted against any such entity which, if determined adversely to any such entity, would reasonably be expected to have a Material Adverse Effect; and all tax liabilities are adequately provided for on the respective books of such entities;
(rr) the Fund maintains insurance (issued by insurers of recognized financial responsibility) against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged; all policies of insurance insuring the Fund or its business, assets, employees, officers and trustees, including the Fund’s trustees and officers errors and omissions insurance policy and its fidelity bond required by Rule 17g-1 under the 1940 Act, are in full force and effect; the Fund is in compliance with the terms of such policies and fidelity bond in all material respects; and there are no claims by the Fund under any such policies or fidelity bond as to which any insurance company is denying liability or defending under a reservation of rights clause; the Fund has not been refused any insurance coverage sought or applied for; and the Fund has no reason to believe that it will not be able to renew its existing insurance coverage and fidelity bond as and when such coverage and fidelity bond expires or to obtain similar coverage and fidelity bond from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Registration Statement and the Prospectus;
(ss) the Fund is not in violation of nor has it received notice of any violation with respect to any law, rule, regulation, order, decree or judgment applicable to its business, including those relating to transactions with affiliates, except for those violations that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;
(tt) neither the Fund nor the Advisor or, to the knowledge of the Fund or the Advisor, any officer, trustee, director, agent or employee purporting to act on behalf of the Fund, the Advisor, has at any time, directly or indirectly, (i) made any contributions to any candidate for political office, or failed to disclose fully any such contributions, in violation of law, (ii) made any payment to any state, federal or foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or allowed by applicable law (including the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”)), (iii) engaged in any transactions or maintained any bank account on behalf of the Fund or used any corporate funds except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the Fund, (iv) violated any provision of the FCPA, or any applicable law or regulation thereunder, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law or (v) made any other unlawful payment;
(uu) except as disclosed in the Prospectus, the Fund (i) does not have any material lending or other relationship with any bank or lending affiliate of the Placement Agents and (ii) does not intend to use any of the proceeds from the sale of the Common Shares hereunder to repay any outstanding debt owed to any affiliate of the Placement Agents;
(vv) except as otherwise disclosed in the Prospectus, there are no outstanding loans, extensions of credit or advances or guarantees of indebtedness by the Fund to or for the benefit of any of the officers, trustees or affiliates of the Fund or any of the members of the families of any of them;
(ww) all securities issued by the Fund or any trusts established by the Fund have been or will be issued and sold in compliance with (i) all applicable federal, state foreign and local securities laws, (ii) the
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laws of the applicable jurisdiction of incorporation of the issuing entity and (iii) to the extent applicable to the issuing entity, the requirements of the New York Stock Exchange;
(xx) the Fund has (i) appointed a Chief Compliance Officer and (ii) adopted and implemented written policies and procedures reasonably designed to prevent violation of the Federal Securities Laws (as that term is defined in Rule 38a-1 under the 1940 Act) by the Fund, including policies and procedures that provide oversight of compliance by each investment advisor, administrator and transfer agent of the Fund;
(yy) the Fund has filed the Notification of the registration of the Fund as an investment company under the 1940 Act;
(zz) any statistical and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources that the Fund believes to be reliable and accurate, and the Fund has obtained the written consent to the use of such data from such sources to the extent required;
(aaa) except with respect to the Placement Agents, the Fund has not incurred any liability for any finder’s fees or similar payments in connection with the transactions contemplated hereby;
(bbb) to the Fund’s and the Advisor’s knowledge, there are no affiliations or associations between any member of FINRA and any of the Fund’s officers, trustees or 5% or greater securityholders, except as disclosed in writing to the Placement Agents in connection with information that may be required to be provided to FINRA, and none of the Fund or the Advisor has any material lending or other relationship with a bank or lending institution affiliated with any of the Placement Agents, except as set forth in the Registration Statement and the Prospectus;
(ccc) no relationship, direct or indirect, exists between or among the Fund on the one hand, and the trustees, officers, shareholders, customers or suppliers of the Fund on the other hand, which is required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement and the Prospectus and which is not so described;
(ddd) the Fund has not distributed and, prior to the completion of the distribution of the Common Shares, will not distribute any offering material in connection with the transactions contemplated herein other than the Prospectus to which the Placement Agents has consented;
(eee) the Fund does not have any employees; to the knowledge of the Fund and the Advisor, there are no existing or threatened labor disputes with the employees of the Advisor which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and none of the Fund or the Advisor is aware of any plans of any executive, key employee or significant group of employees of the Advisor to terminate their employment;
(fff) the Fund and its officers and trustees, in their capacities as such, are in compliance in all material respects with the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”) and the rules and regulations promulgated thereunder with which any of them is required to comply;
(ggg) the Fund intends to direct the investment of the net proceeds of the sale of Common Shares from the sale of the Placement Securities to conduct its activities in such a manner as to comply with the requirements for qualification and taxation as a regulated investment company (“RIC”) under Subchapter M of the Code; the Fund has been and is currently in compliance with the requirements of Subchapter M of the Code necessary to qualify as a RIC and intends to be treated as a RIC under Subchapter M of the Code for any taxable year in which the Fund is an investment company registered under the 1940 Act;
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(hhh) none of the Fund, the Advisor or, to the Fund’s knowledge, any affiliates or any trustee, officer, agent or employee of, or other person associated with or acting on behalf of, the Fund or the Advisor (each, a “Person”) is (i) the subject to any sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department (“OFAC”), the United Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), or (ii) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria); and Fund will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any entity, partner or joint venturer or other person or entity for the purpose of financing the activities of any person currently subject to the Sanction, or in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise);
(iii) the operations of the Fund are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the Money Laundering Control Act of 1986, as amended, the Bank Secrecy Act, as amended, the United and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001, and any other money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the “Money Laundering Laws”), except for any such non-compliance as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and no action, suit or proceeding by or before any Governmental Authority or any arbitrator involving the Fund with respect to the Money Laundering Laws is pending or, to the Fund’s knowledge, threatened;
(jjj) as required by the Financial Crimes Enforcement Network within the U.S. Department of the Treasury, the Fund has delivered to the Placement Agents, on or prior to the date of execution of this Agreement, such beneficial ownership certifications and information as the Placement Agents may have requested, together with copies of identifying documentation, and the Fund undertakes to provide such additional information and supporting documentation as the Placement Agents may reasonably request in connection with the certification of the foregoing certification; and
(kkk) at the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Fund or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Common Shares and at the date hereof, the Fund was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Fund be considered an ineligible issuer.
SECTION 5. Representations and Warranties of the Advisor. The Advisor represents and warrants to, and agree with, each Placement Agent as of each Applicable Time and as of each Settlement Date, as follows:
(a) the Advisor is a limited liability company duly formed and is validly existing in good standing under the laws of the state of Delaware, with the requisite limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and is duly qualified to transact business and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to be so qualified or in good standing would not reasonably be expected to have an Advisor Material Adverse Effect (as defined below);
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(b) the Advisor is duly registered with the Commission as an investment adviser under the Advisers Act and is registered with the appropriate state authority in all states in which it needs to be registered; the Advisor is not prohibited by the Advisers Act, the 1940 Act or any state statute from acting under the Investment Advisory Agreement, as contemplated by the Prospectus; there does not exist any proceeding, or to the Advisor’s knowledge, any facts or circumstances the existence of which could lead to any proceeding which might materially and adversely affect the registration of the Advisor with the Commission or any applicable state regulatory authority;
(c) the Advisor has or had the requisite limited liability company power and authority to enter into this Agreement and the Investment Advisory Agreement; the execution and delivery of, and the performance by the Advisor of its obligations under, this Agreement and the Investment Advisory Agreement have been duly and validly authorized by the Advisor; and this Agreement and the Investment Advisory Agreement have been duly executed and delivered by the Advisor, and each such agreement constitutes the valid and legally binding agreement of the Advisor, enforceable against the Advisor in accordance with its terms, except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws and subject to the qualification that the enforceability of the Advisor’s obligations hereunder and thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and by general equitable principles;
(d) the Investment Advisory Agreement is in full force and effect and neither the Advisor nor, to the knowledge of the Advisor, any other party to the Investment Advisory Agreement is in default thereunder, and, no event has occurred which with the passage of time or the giving of notice or both would constitute a default by the Advisor under such document;
(e) the Advisor has the financial, human and other resources available to it necessary for the performance of its services and obligations as contemplated in the Prospectus and under this Agreement and the Investment Advisory Agreement, as applicable;
(f) no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Advisor or the Advisor’s property is pending or, to the knowledge of the Advisor, threatened that (i) is required to be described in the Prospectus that is not so described as required, (ii) would reasonably be expected to have a material adverse effect on the ability of the Advisor to fulfill its obligations hereunder or under the Investment Advisory Agreement, or (iii) would reasonably be expected to have a material adverse effect on the condition (financial or otherwise), earnings, business or properties of the Advisor, whether or not arising from transactions in the ordinary course of business (an “Advisor Material Adverse Effect”), except as set forth in or contemplated in the Prospectus;
(g) the Advisor is not in breach of, or in default under (and no event has occurred which with notice, lapse of time, or both would constitute a breach of, or default under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or part of such indebtedness under), its Charter Documents or in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, license, indenture, mortgage, deed of trust, bank loan or credit agreement or other agreement or instrument to which the Advisor is a party or by which any of the Advisor or the Advisor’s properties is bound or affected, except for such breaches or defaults which would not, individually or in the aggregate, reasonably be expected to have an Advisor Material Adverse Effect;
(h) since the respective dates as of which information is given in the Prospectus, except as otherwise stated therein, (i) there has been no event, circumstance or change that has had, or would reasonably be expected to have an Advisor Material Adverse Effect; and (ii) there have been no transactions
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entered into by the Advisor, which are material to the Advisor other than those in the ordinary course of its business as described in the Prospectus;
(i) the Advisor possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its business in the manner described in the Prospectus, and the Advisor has not received any notice of proceedings relating to the revocation or modification thereof, except where the failure to possess any such licenses, certificates, permits or other authorizations, or the revocation or modification thereof, would not, individually or in the aggregate, reasonably be expected to have an Advisor Material Adverse Effect and would not reasonably be expected to have an Advisor Material Adverse Effect on the transactions contemplated by this Agreement;
(j) there are no actions, suits, arbitrations, claims, proceedings, inquiries or investigations pending or, to the knowledge of the Advisor, threatened against the Advisor, or any of the Advisor’s respective properties, or to the knowledge of the Advisor, their respective directors, officers or affiliates, at law or in equity, or before or by any Governmental Authority, in each case which would reasonably be expected to result in a judgment, decree, award or order having an Advisor Material Adverse Effect;
(k) the Advisor owns or possesses adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights, software and design licenses, trade secrets, other intangible property rights and know-how (collectively “Advisor Intellectual Property”), as are necessary to entitle the Advisor to conduct the Advisor’s business described in the Prospectus, except where the failure to own, license or have such right would not reasonably be expected to have an Advisor Material Adverse Effect; and the Advisor has not received written notice of any infringement of or conflict with (and the Advisor does not know of any such infringement of or conflict with) asserted rights of others with respect to any Advisor Intellectual Property which would reasonably be expected to have an Advisor Material Adverse Effect;
(l) no (i) approval, authorization, consent or order of or filing with any Governmental Authority, (ii) authorization, approval, vote or other consent of any holder of securities of the Advisor or any creditor of the Advisor, or (iii) waiver or consent under any material agreement is required in connection with the Advisor’s execution, delivery and performance of this Agreement or the Fund Agreements, to the extent a party thereto, the consummation of the transactions contemplated by this Agreement (including, without limitation, the issuance and sale of the Common Shares), and the delivery of the Common Shares, other than (A) such as have been obtained, or will have been obtained at each Settlement Date with respect to the Common Shares issued and sold as of such Settlement Date, under the Securities Act, the Exchange Act, the 1940 Act, the Advisers Act and the rules and regulations of FINRA or the New York Stock Exchange and (B) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Securities are being offered by the Placement Agents;
(m) the Advisor owns or leases or has access to all properties and assets as are necessary to the conduct of its operations as presently conducted;
(n) neither the execution, delivery or performance by the Advisor of this Agreement or the Investment Advisory Agreement, nor the consummation of the transactions herein or therein contemplated, nor the fulfillment of the terms hereof or thereof conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Advisor pursuant to, (i) the Charter Documents of the Advisor, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Advisor is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Advisor of any court, regulatory body, administrative
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agency, governmental body, arbitrator or other authority having jurisdiction over the Advisor or any of the Advisor’s properties, except in the case of clauses (ii) and (iii) where such breach or violation, either singly or in the aggregate, would not reasonably be expected to have an Advisor Material Adverse Effect;
(o) the Advisor has not taken, directly or indirectly, any action designed to, or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Fund to facilitate the issuance, sale or resale of the Common Shares and the Advisor is not aware of any such action taken or to be taken by any affiliates of the Advisor;
(p) the operations of the Advisor are and have been conducted at all times in compliance with applicable Money Laundering Laws, except for any such non-compliance as would not, individually or in the aggregate, reasonably be expected to have an Advisor Material Adverse Effect, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Advisor with respect to the Money Laundering Laws is pending or, to the knowledge of the Advisor, threatened;
(q) the Advisor maintains a system of internal controls sufficient to provide reasonable assurance that (i) transactions effectuated by it under the Investment Advisory Agreement are executed in accordance with its management’s general or specific authorization and (ii) access to the Fund’s assets is permitted only in accordance with its management’s general or specific authorization;
(r) the Advisor (i) has adopted and implemented written policies and procedures pursuant to Rule 206(4)-7 under the Advisers Act reasonably designed to prevent violations of the Advisers Act by the Advisor; (ii) is conducting its business in compliance with all laws, rules, regulations, decisions, directives and orders except for such failure to comply which would not reasonably be expected to result in an Advisor Material Adverse Effect; and (iii) is conducting its business in compliance in all material respects with the applicable requirements of the Advisers Act;
(s) the description of the Advisor and its business, and the statements attributable to the Advisor, in each of the Registration Statement and the Prospectus did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
(t) the Advisor is not, and after giving effect to the sale of the Common Shares and the application of the proceeds thereof as described in the Registration Statement and the Prospectus will not be, required to register as an “investment company” (as defined in the 1940 Act);
(u) the Advisor maintains insurance (issued by insurers of recognized financial responsibility) of the types and in the amounts generally deemed adequate for their respective businesses and consistent with insurance coverage maintained by similar companies in similar businesses, including, but not limited to, insurance covering real and personal property owned or leased by the Advisor against theft, damage, destruction, acts of vandalism and all other risks customarily insured against, all of which insurance is in full force and effect;
(v) any certificate signed by any officer of the Advisor and delivered to the Placement Agents or to counsel for the Placement Agents shall be deemed a representation and warranty by the Advisor to the Placement Agents as to matters covered thereby; and
(w) the Advisor’s information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are
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adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Fund, its subsidiaries and the Advisor as currently conducted. The Advisor implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect the Fund’s, its subsidiaries’ and the Advisor’s material confidential information and the integrity, continuous operation, redundancy and security of all material IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with its business, and there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except, in each case, as would not reasonably be expected to, individually or in the aggregate, have an Advisor Material Adverse Effect. The Fund, its subsidiaries and the Advisor are presently in compliance in all material respects with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification, except, in each case, as would not reasonably be expected to, individually or in the aggregate, have an Advisor Material Adverse Effect.
SECTION 6. Certain Covenants of the Fund and the Advisor. The Fund hereby agrees, and the Advisor ▇▇▇▇▇▇ agrees, with each Placement Agent:
(a) to use commercially reasonable efforts to furnish such information as may be required and otherwise to cooperate with the Placement Agents in qualifying the offering of the Common Shares and the sale of the Common Shares under the securities or blue sky laws of such jurisdictions (both domestic and foreign) as the Placement Agents may designate and to maintain such qualifications in effect as long as requested by the Placement Agents for the distribution of the Placement Securities; provided, however, that the Fund shall not be required to qualify as a foreign organization, to subject itself to taxation or to consent to the service of process under the laws of any such jurisdiction (except service of process with respect to the offering and the sale of the Common Shares);
(b) to prepare the Prospectus in a form approved by the Placement Agents and file such Prospectus with the Commission pursuant to Rule 424 of the Securities Act Regulations within the applicable time period prescribed for such filing by Rule 424 of the Securities Act Regulations and will provide evidence satisfactory to the Placement Agents of such timely filing; and to furnish promptly (and with respect to the initial delivery of such Prospectus, not later than 10:00 a.m. (New York City time) on the day following the execution and delivery of this Agreement or on such other day as the parties may mutually agree) to the Placement Agents copies of the Prospectus (or of the Prospectus as amended or supplemented if the Fund shall have made any amendments or supplements thereto after the effective date of the Registration Statement) in such quantities and at such locations as the Placement Agents may reasonably request for the purposes contemplated by the Securities Act Regulations, which Prospectus and any amendments or supplements thereto furnished to the Placement Agents will be identical to the version transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent permitted by Regulation S-T;
(c) to advise the Placement Agents immediately, confirming such advice in writing, of (i) the receipt of any comments from, or any request by, the Commission for amendments or supplements to the Registration Statement or the Prospectus, or for additional information with respect thereto, (ii) when, prior to the termination of this Agreement, any amendment to the Registration Statement shall have been filed or become effective, (iii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of Prospectus, or of the suspension of the qualification of the Common Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes and, if the Commission or any other government agency or authority should issue any such order, to make every reasonable effort to obtain the lifting or removal of such order as soon as possible, (iv) any examination pursuant to Section 8(e) of the
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Securities Act concerning the Registration Statement that becomes known to the Fund, or (v) if the Fund becomes subject to a proceeding under Section 8A of the Securities Act in connection with the distribution of the Common Shares contemplated herein; and, so long as a prospectus is required to be delivered in connection with this Agreement, to advise the Placement Agents promptly of any proposal to amend or supplement the Registration Statement or the Prospectus and to file no such amendment or supplement to which the Placement Agents shall reasonably object in writing;
(d) to furnish to the Placement Agents for as long as this Agreement is in effect (i) as soon as available, copies of all annual, quarterly and current reports or other communications supplied to holders of Common Shares, (ii) as soon as practicable after the filing thereof, copies of all reports filed by the Fund with the Commission, FINRA or any securities exchange, and (iii) such other information as the Placement Agents may reasonably request regarding the Fund (provided, however, that in each case of (i), (ii) and (iii), the filing of same with ▇▇▇▇▇ or any successor system of the Commission shall be deemed to satisfy the obligation to furnish any material required to be furnished hereunder);
(e) to advise the Placement Agents promptly of the happening of any event or development known to the Fund within the term of this Agreement which, in the judgment of the Fund or in the reasonable opinion of the Placement Agents or counsel for the Placement Agents, (i) would require the making of any change in the Prospectus so that the Prospectus would not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (ii) would make it necessary to amend or supplement the Prospectus in order to comply with any law and, in each case, during such time, to promptly prepare and furnish to the Placement Agents copies of the proposed amendment or supplement before filing any such amendment or supplement with the Commission and thereafter promptly furnish at the Fund’s own expense to the Placement Agents and to soliciting dealers, copies in such quantities and at such locations as the Placement Agents may from time to time reasonably request of an appropriate amendment or supplement to the Prospectus so that the Prospectus as so amended or supplemented will not when it is so delivered, include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or so that the Prospectus will comply with applicable law;
(f) to file promptly with the Commission any amendment or supplement to the Registration Statement, or the Prospectus contemplated by Section 6(e);
(g) prior to filing with the Commission any amendment or supplement to the Registration Statement or the Prospectus to furnish a copy thereof to the Placement Agents and counsel for the Placement Agents and to obtain the consent of the Placement Agents (which consent shall not be unreasonably withheld or delayed) to the filing;
(h) to furnish promptly to the Placement Agents a signed copy of the Registration Statement, as initially filed with the Commission, and of all amendments or supplements thereto (including all exhibits filed therewith) and such number of conformed copies of the foregoing (without exhibits thereto) as the Placement Agents may reasonably request;
(i) to timely file with the Commission any documents required pursuant to Section 13, 14, or 15(d) of the Exchange Act during the prospectus delivery period in the manner and within the time periods required by the Exchange Act and the Exchange Act Regulations;
(j) to apply the net proceeds from the sale of the Placement Securities in accordance with its statements under the caption “Use of Proceeds” in the Prospectus;
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(k) to make generally available to its security holders, but in any event not later than the end of the fiscal quarter first occurring after the first anniversary of the effective date of the Registration Statement, an earnings statement complying with the provisions of the last paragraph of Section 11(a) of the Securities Act and Rule 158 of the Securities Act Regulations covering a period of 12 months beginning after the effective date of the Registration Statement;
(l) to use its reasonable best efforts to file a supplemental listing application with the New York Stock Exchange;
(m) to take all necessary actions to ensure that it is in compliance with all applicable corporate governance requirements set forth in the New York Stock Exchange Listed Company Manual that are currently in effect and applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and all rules and regulations promulgated thereunder that are currently in effect;
(n) during the pendency of any Placement Notice (as amended by the corresponding Acceptance, if applicable) given hereunder, the Fund shall provide the Placement Agents notice as promptly as reasonably possible before it offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any Common Shares (other than Placement Securities offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Shares, warrants or any rights to purchase or acquire Common Shares; provided, that such notice shall not be required in connection with the (i) the issuance of securities in connection with an acquisition, merger or sale or purchase of assets described in the Prospectus or (ii) the issuance or sale of Common Shares pursuant to any dividend reinvestment plan that the Fund may adopt from time to time;
(o) not to, and to use its best efforts to cause its officers, trustees, directors and affiliates not to, (i) take, directly or indirectly, prior to termination of the terms and arrangement contemplated by this Agreement, any action designed to stabilize or manipulate the price of any security of the Fund, or which may cause or result in, or which might in the future reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Fund, to facilitate the issuance, sale or resale of the Common Shares or (ii) sell, bid for, purchase or pay anyone (other than the Placement Agents) any compensation for soliciting purchases of the Common Shares;
(p) that the Fund shall obtain or maintain, as appropriate, directors and officers liability insurance in an amount deemed advisable by the Fund in its reasonable discretion;
(q) that the Fund will comply with all of the provisions of any undertakings in the Registration Statement;
(r) that the Fund will use its reasonable best efforts to meet the requirements of Subchapter M of the Code to qualify as a RIC under the Code with respect to any fiscal year in which the Fund is a registered investment company;
(s) that the Fund will use its reasonable best efforts to maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) material information relating to the Fund and the assets managed by the Advisor is promptly made known to the officers responsible for establishing and maintaining the system of internal accounting controls; and (ii) any significant deficiencies or weaknesses in the design or operation of internal accounting controls which could adversely affect the Fund’s ability to record, process, summarize and report financial data, and any fraud whether or not material that involves management or other employees who have a significant role in internal controls, are adequately and promptly disclosed to the Fund’s independent auditors and the audit committee of the Fund’s board of trustees;
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(t) neither the Fund, the Advisor, nor any of their affiliates (A) has taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which could reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any security of the Fund to facilitate the issuance and sale or resale of the Common Shares, (B) has since the filing of the Registration Statement sold, bid for or purchased, or paid anyone any compensation for soliciting purchases of, Common Shares and (C) will not, until the completion of the distribution (within the meaning of Regulation M under the Exchange Act) of the Common Shares, sell, bid for or purchase, pay or agree to pay to any person any compensation for soliciting another to purchase Common Shares; provided that any action in connection with a dividend reinvestment plan will not be deemed to be within the terms of this Section 6(t); and
(u) except by means of the Prospectus or as otherwise agreed by the parties, the Fund (including its agents and representatives, other than the Placement Agents in their capacity as such) will not make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405 under the Securities Act), and including without limitation any advertisement as defined in Rule 482 under the Securities Act, required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy Common Shares hereunder; provided, that the foregoing shall not prohibit the Fund from (i) making its required filings with the Commission or the dissemination thereof as required by the federal securities laws, state law or the rules and regulations of the New York Stock Exchange and (ii) disseminating any additional sales material used in connection with the Registration Statement other than in connection with the offer and sale of the Common Shares hereunder.
SECTION 7. Sale and Delivery to Placement Agents; Settlement.
(a) On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, upon the Applicable Placement Agent’s acceptance of the terms of a Placement Notice or upon receipt by the Applicable Placement Agent of an Acceptance, as the case may be, and unless the sale of the Placement Securities described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Applicable Placement Agent, for the period specified in the Placement Notice (as amended by the corresponding Acceptance, if applicable), will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Placement Securities in negotiated transactions or transactions that are deemed to be “at the market” offerings up to the amount specified, and otherwise in accordance with the terms of such Placement Notice (as amended by the corresponding Acceptance, if applicable). Each of the Fund and the Advisor acknowledges and agrees that (i) there can be no assurance that the Applicable Placement Agent will be successful in selling Placement Securities and (ii) the Applicable Placement Agent will incur no liability or obligation to the Fund, the Advisor or any other person or entity if it does not sell Placement Securities for any reason other than a failure by the Applicable Placement Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such Placement Securities as required under this Section 7 and (iii) the Applicable Placement Agent shall be under no obligation to purchase Common Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by Applicable Placement Agent in the Placement Notice (as amended by the corresponding Acceptance, if applicable).
(b) Unless otherwise specified in the applicable Placement Notice (as amended by the corresponding Acceptance, if applicable), settlement for sales of Placement Securities will occur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be delivered to the Fund on a Settlement Date against receipt of the Placement Securities sold (the “Net Proceeds”) will be equal to the aggregate offering price received by the Applicable Placement Agent at which such Placement Securities were sold, after deduction for (i) the Applicable Placement Agent’s commission, discount or other compensation for such sales payable by the Fund as calculated in accordance with the
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terms of Exhibit C attached hereto, and (ii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.
(c) On or before each Settlement Date, the Fund will, or will cause its transfer agent (the “Transfer Agent”) to, electronically transfer the Placement Securities being sold by crediting the Applicable Placement Agent’s or its designee’s account (provided the Applicable Placement Agent shall have given the Fund written notice of such designee prior to the Settlement Date) at The Depository Trust Fund through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto, which in all cases shall be freely tradable, transferable, registered shares in good deliverable form. The Applicable Placement Agent will deliver the related Net Proceeds in same day funds to an account designated by the Fund prior to the Settlement Date. The Fund agrees that if the Fund, or the Transfer Agent (if applicable), defaults in its obligation to deliver Placement Securities on a Settlement Date, the Fund agrees that in addition to and in no way limiting the rights and obligations set forth in Section 11(a) hereto, it will (i) hold the Applicable Placement Agent harmless against any loss, liability, claim, damage, or expense whatsoever (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Fund or the Transfer Agent (if applicable) and (ii) pay to the Applicable Placement Agent any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.
(d) The Placement Securities shall be in such denominations and registered in such names as the Applicable Placement Agent may request in writing at least one full Trading Day before the Settlement Date. The Fund shall deliver the Placement Securities, if any, through the facilities of The Depository Trust Fund unless the Applicable Placement Agent shall otherwise instruct.
(e) Under no circumstances shall the Fund cause or request the offer or sale of any Common Shares, if after giving effect to the sale of such Common Shares, the aggregate offering price of the Common Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Common Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement, (C) the amount authorized from time to time to be issued and sold under this Agreement by the Fund and notified to the Placement Agents in writing. Under no circumstances shall the Fund cause or request the offer or sale of any Common Shares pursuant to this Agreement (i) at a price lower than the minimum price authorized from time to time by the Fund and notified to the Placement Agents in writing and (ii) at a price (net of the Placement Agents’ commission, discount or other compensation for such sales payable by the Fund as calculated in accordance with the terms of Exhibit C attached hereto) lower than the Fund’s then current net asset value per share (as calculated pursuant to the 1940 Act), unless the Fund has received the requisite approval from shareholders as required pursuant to the 1940 Act. Further, under no circumstances shall the aggregate offering price of Common Shares sold pursuant to this Agreement, including any separate underwriting or similar agreement covering principal transactions described in this Agreement, exceed the Maximum Amount.
SECTION 8. Payment of Expenses.
The Advisor agrees to pay or cause to be paid all costs and expenses incident to the performance of the Fund’s obligations under this Agreement, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, including expenses, fees and taxes in connection with (i) the preparation and filing of the Registration Statement, the Prospectus and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to the Placement Agents and to soliciting dealers (including costs of mailing and shipment), (ii) the printing of this Agreement and any dealer agreements and furnishing of copies of each to the Placement Agents and to soliciting dealers (including costs of mailing and shipment), (iii) the qualification for the offering and the sale of the Common Shares under state laws that the Fund and the Placement Agents have mutually agreed are appropriate and the
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determination of their eligibility for investment under state law as aforesaid (including the reasonable legal fees and filing fees and other disbursements of counsel for the Placement Agents relating thereto and the printing and furnishing of copies of any blue sky surveys or legal investment surveys to the Placement Agents and to soliciting dealers), (iv) filing for review of the terms of the sale of the Placement Securities by FINRA, (v) the fees and expenses of the Transfer Agent, any information agent, any transfer agent or registrar for the Common Shares, (vi) the fees and expenses incurred in connection with the listing of the Common Shares on the New York Stock Exchange, (vii) making written communications or sales materials with respect to the sale of the Placement Securities, (viii) preparing and distributing copies of the transaction documents for the Placement Agents and their legal counsel, (ix) the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, as counsel to the Placement Agents, in an amount not to exceed $50,000 in connection with due diligence and the preparation of this Agreement and (x) performing the Fund’s other obligations hereunder. Upon the request of the Placement Agents, the Fund will provide funds in advance for FINRA filing fees.
SECTION 9. Conditions of Placement Agents’ Obligations. The respective obligations of the Fund and the Advisor, and the several obligations of the Placement Agents, hereunder are subject to the condition that the Registration Statement has become effective and at each Settlement Date no stop order suspending the effectiveness of the Registration Statement shall have been issued under the Securities Act and no proceedings with respect thereto shall have been initiated or, to the Fund’s knowledge, threated by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Placement Agents.
The several obligations of each Placement Agent are subject to the following further conditions:
(a) On or prior to the date that the first Common Shares are sold pursuant to the terms of this Agreement and after the Fund:
(i) (A) files the Prospectus relating to the Placement Securities or amends or supplements the Registration Statement or the Prospectus relating to the Placement Securities by means of a post-effective amendment, sticker, or supplement relating to the Placement Securities; or (B) files a Rule 424 filing (other than (i) a Rule 424 filing solely to update the amount of Placement Securities sold through the Placement Agents, Net Proceeds to the Fund and the compensation payable by the Fund with respect to such Placement Securities or (ii) a Rule 424 filing solely to update management’s estimate of the Fund’s financial metrics as of the most recent month end (“Financial Metrics 424”)); and
(ii) files an annual report and semi-annual report on Form N-CSR and N-CSRS, respectively, and monthly reports on Form N-PORT, each quarter, as applicable (“Quarterly Report”), (each such date of filing of one or more of the documents referred to in clauses (i) and (ii) and any time of request by the Placement Agents shall be a “Representation Date”);
each of the Fund and the Advisor shall furnish the Placement Agents with a certificate, in the respective form attached hereto as Exhibit E (each, an “Officer’s Certificate”) within five (5) Business Days of any Representation Date. The requirement to provide a certificate under this Section 9(a) shall be waived for any Representation Date occurring at a time at which no Placement Notice (as amended by the corresponding Acceptance, if applicable) is pending, which waiver shall continue until the date the Fund delivers a Placement Notice hereunder. Notwithstanding the foregoing, if the Fund subsequently decides to sell Placement Securities following a Representation Date when the Fund relied on such waiver and did not provide the Placement Agents with a certificate under this Section 9(a), then before the Fund delivers the Placement Notice or the Applicable Placement Agent sells any Placement Securities, each of the Fund and
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the Advisor shall provide the Placement Agents with the applicable Officer’s Certificate, dated the date of the Placement Notice.
(b) On or prior to the date of the first Placement Notice and within five (5) Business Days of each Representation Date with respect to which the Fund and the Advisor are obligated to deliver the applicable Officer’s Certificate for which no waiver is applicable, the Fund shall cause to be furnished to the Placement Agents written opinions of Dechert LLP and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A. or other counsel satisfactory to Ladenburg (collectively, “Fund Counsel”), in form and substance reasonably satisfactory to Ladenburg and its counsel, dated the date that the opinion is required to be delivered, substantially similar to the respective form attached hereto as Exhibit D modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented; provided, however, that in lieu of such opinions for subsequent Representation Dates, any such counsel may furnish the Placement Agents with a letter (a “Reliance Letter”) to the effect that the Placement Agents may rely on a prior opinion delivered under this Section 9(b) to the same extent as if it were dated the date of such letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented at such Representation Date).
(c) On or prior to the date of the first Placement Notice and within five (5) Business Days of each Representation Date with respect to which the Fund and the Advisor are obligated to deliver the applicable Officer’s Certificate for which no waiver is applicable (each, a “Comfort Letter Triggering Event”), the Fund shall cause (A) its independent accountants to furnish the Placement Agents a letter (the “Comfort Letter”), dated the date the Comfort Letter is delivered, in form and substance satisfactory to Ladenburg, (i) confirming that they are an independent registered public accounting firm within the meaning of the Securities Act, the Exchange Act and the Public Fund Accounting Oversight Board, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter and (B) the Chief Financial Officer of the Fund to furnish to Placement Agents a certificate (the “CFO Certificate”) dated the date that the certificate is required to be delivered, in form and substance satisfactory to Ladenburg. Notwithstanding the immediately prior sentence, and in lieu of a Comfort Letter, the Fund may deliver to the Placement Agents a certificate of the Fund’s Chief Financial Officer substantially in the form attached hereto as Exhibit F, or in such other form or forms as are acceptable to counsel for the Placement Agents (the “Alternate CFO Certificate”), (i) in the event that the Registration Statement is amended or the Prospectus supplemented to include additional unaudited financial information, including from a Quarterly Report, (ii) upon the filing by the Fund of a semi-annual report on Form N-CSR (“Semi-Annual Report”), or (iii) upon the filing by the Fund of a Quarterly Report, on the date that such amendment to the Registration Statement is filed or that the Prospectus is so supplemented, or within three (3) Business Days of the Fund’s filing of a Semi-Annual Report or Quarterly Report, as applicable. The requirement to provide a Comfort Letter or Alternate CFO Certificate, as applicable, and a CFO Certificate under this Section 9(c) shall be waived if at the time of the Comfort Letter Triggering Event there is no Placement Notice outstanding. Notwithstanding the foregoing, if the Fund subsequently decides to issue a Placement Notice, the Fund shall provide the Placement Agents with a Comfort Letter or Alternate CFO Certificate, as applicable, and a CFO Certificate prior to the issuance of such Placement Notice.
(d) On or prior to the date of the first Placement Notice and within five (5) Business Days of each Representation Date with respect to which the Fund and the Advisor are obligated to deliver the applicable Officer’s Certificate for which no waiver is applicable, the Placement Agents shall have received a written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in form and substance satisfactory to Ladenburg, dated
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the date that the opinion is required to be delivered, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented; provided, however, that in lieu of such opinions for subsequent Representation Dates, counsel may furnish the Placement Agents with a Reliance Letter to the effect that the Placement Agents may rely on a prior opinion delivered under this Section 9(d) to the same extent as if it were dated the date of such letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented at such Representation Date).
(e) Within five (5) Business Days of the Fund filing with the Commission a Financial Metrics 424, the Fund shall cause to be furnished to the Placement Agents a CFO Certificate certifying the information included in the Financial Metrics 424, in a form and substance satisfactory to Ladenburg.
(f) The Registration Statement shall have become effective and shall be available for (i) all sales of Placement Securities issued pursuant to all prior Placement Notices (each as amended by a corresponding Acceptance, if applicable) and (ii) the sale of all Placement Securities contemplated to be issued by any Placement Notice (as amended by the corresponding Acceptance, if applicable).
(g) None of the following events shall have occurred and be continuing: (i) receipt by the Fund of any request for additional information from the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, including any notice objecting to the use of the Registration Statement or similar order pursuant to Section 8 of the Securities Act having been issued and proceedings therefor initiated, or to the knowledge of the Fund, threatened by the Commission; (iii) receipt by the Fund of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) the occurrence of any event that makes any material statement made in the Registration Statement or the Prospectus untrue in any material respect or that requires the making of any changes in the Registration Statement or the related Prospectus or such documents so that, in the case of the Registration Statement, it will not contain any materially 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, that in the case of the Prospectus, it will not contain any materially 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, in the light of the circumstances under which they were made, not misleading.
(h) Except as contemplated in the Prospectus, no Fund Material Effect or Advisor Material Adverse Effect shall have occurred.
(i) The Placement Securities shall either have been (i) approved for listing on the New York Stock Exchange, subject only to notice of issuance, or (ii) the Fund shall have filed with the New York Stock Exchange a “Supplemental Listing Application” for listing of the Placement Securities on the New York Stock Exchange at, or prior to, the issuance of any Placement Notice.
(j) Trading in the Common Shares shall not have been suspended on the New York Stock Exchange.
(k) All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.
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(l) No action, suit, proceeding, inquiry or investigation shall have been instituted or threatened by the Commission which would adversely affect the Fund’s standing as a registered investment company under the Investment Company Act or the standing of the Advisor as a registered investment adviser under the Advisers Act.
(m) If any condition specified in this Section 9 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by Ladenburg by notice to the Fund, and such termination shall be without liability of any party to any other party except as provided in Section 8 hereof and except that, in the case of any termination of this Agreement, Sections 4, 5, 11, and 12 hereof shall survive such termination and remain in full force and effect.
SECTION 10. Termination.
(a) Ladenburg, on behalf of the Placement Agents, may terminate this Agreement with respect to one or more Placement Agents or in its entirety, by notice to the Fund, as hereinafter specified at any time if (x) since the time of execution of this Agreement or the earlier respective dates as of which information is given in the Registration Statement and the Prospectus, there has been any Material Adverse Change or any development involving a prospective Material Adverse Change in the business, properties, management, financial condition or results of operation of the Fund or the Advisor, which would, in Ladenburg’s judgment, make it impracticable or inadvisable to proceed with the sale of the Placement Securities on the terms and in the manner contemplated in the Registration Statement and the Prospectus, or (y) there shall have occurred: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market; (ii) a suspension or material limitation in trading in the Fund’s securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) an outbreak or escalation of hostilities or acts of terrorism involving the United States or a declaration by the United States of a national emergency or war; or (v) any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in Ladenburg’s judgment makes it impracticable or inadvisable to proceed with the sale of the Placement Securities on the terms and in the manner contemplated in the Registration Statement and the Prospectus, or (z) there shall have occurred any downgrading, or any notice or announcement shall have been given or made of (i) any intended or potential downgrading or (ii) any watch, review or possible change that does not indicate an affirmation or improvement, in the rating accorded any securities of or guaranteed by the Fund by any “nationally recognized statistical rating organization,” as that term is defined in Rule 436(g)(2) under the Securities Act.
(b) The Fund shall have the right, by giving three (3) days’ notice unless such notice is waived by the recipient, as hereinafter specified, to terminate this Agreement, with respect to one or more Placement Agents or in its entirety, in its sole discretion at any time after the date of this Agreement.
(c) Each Placement Agent shall have the right, by giving three (3) days’ notice, unless such notice is waived by the recipient, as hereinafter specified, to terminate its participation in this Agreement in its sole discretion at any time after the date of this Agreement. The termination of this Agreement by a Placement Agent shall not effect the rights and obligations or continued effectiveness of this Agreement with respect to the Fund and the other Placement Agents.
(d) Unless earlier terminated pursuant to this Section 10, this Agreement shall automatically terminate upon the issuance and sale of Placement Securities through the Placement Agents on the terms and subject to the conditions set forth herein with an aggregate offering price equal to the amount set forth prior to Section 1 of this Agreement.
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(e) This Agreement shall remain in full force and effect unless terminated pursuant to this Section 10 or otherwise by mutual agreement of the parties.
(f) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by the Placement Agents or the Fund, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Securities, such Placement Securities shall settle in accordance with the provisions of this Agreement.
(g) If this Agreement is terminated pursuant to this Section 10, such termination shall be without liability of any party to any other party except as provided in Section 8 hereof, and except that, in the case of any termination of this Agreement, Sections 4, 11 and 12 hereof shall survive such termination and remain in full force and effect.
SECTION 11. Indemnification.
(a) Each of the Fund and the Advisor, jointly and severally, agree to indemnify, defend and hold harmless the Placement Agents and any person who controls a Placement Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the respective directors, officers, employees and agents of a Placement Agent, from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation) which, jointly or severally, the Placement Agents or respective controlling person may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or part thereof) or the Prospectus, (ii) any omission or alleged omission to state a material fact required to be stated in any such Registration Statement, or necessary to make the statements made therein not misleading or (iii) any omission or alleged omission from any such Prospectus of a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; except in each case of (i), (ii) and (iii) above insofar as any such loss, expense, liability, damage or claim arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in and in conformity with the information set forth in the last sentence of the first paragraph of Section 11(b). The indemnity agreement set forth in this Section 11(a) shall be in addition to any liability which the Fund or the Advisor may otherwise have.
If any action is brought against a Placement Agent or its respective controlling person in respect of which indemnity may be sought against the Fund and the Advisor pursuant to the foregoing paragraph, such Placement Agent shall promptly notify the Fund and the Advisor in writing of the institution of such action, and the Fund and the Advisor shall assume the defense of such action, including the employment of counsel and payment of expenses; provided, however, that any failure or delay to so notify the Fund and the Advisor will not relieve the Fund and the Advisor of any obligation hereunder, except to the extent that its ability to defend is actually impaired by such failure or delay. A Placement Agent or its controlling person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Placement Agent or such controlling person unless the employment of such counsel shall have been authorized in writing by the Fund and the Advisor in connection with the defense of such action, or the Fund and the Advisor shall not have employed counsel to have charge of the defense of such action within a reasonable time after delivery of notice of such action or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those available to the Fund and the Advisor (in which case the Fund and the Advisor shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the Fund and the Advisor and paid as incurred (it being understood, however, that the Fund and the Advisor
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shall not be liable for the expenses of more than one separate firm of attorneys for the Placement Agents or its controlling persons in any one action or series of related actions in the same jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). In the case of any such separate firm for the Placements Agents, such firm shall be designated in writing by Ladenburg. Anything in this paragraph to the contrary notwithstanding, the Fund and the Advisor shall not be liable for any settlement of any such claim or action effected without its consent.
(b) Each Placement Agent agrees, severally and not jointly, to indemnify, defend and hold harmless each of the Fund, the Advisor, and each of their respective partners, directors, trustees, managers, members and shareholders (as the case may be), and the Fund’s officers that signed the Registration Statement, and any person who controls the Fund and/or the Advisor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation) which the Fund or the Advisor or any such person may incur under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or part thereof) or Prospectus, (ii) any omission or alleged omission to state a material fact required to be stated in any such Registration Statement, or necessary to make the statements therein not misleading, or (iii) any omission or alleged omission from any such Prospectus of a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only insofar as such untrue statement or alleged untrue statement or omission or alleged omission was made in such Registration Statement or Prospectus in reliance upon and in conformity with information furnished in writing by or on behalf of the Placement Agents to the Fund expressly for use therein. The names of each of the Placement Agents set forth on the cover page of the Prospectus, and the eighth paragraph and the last paragraph under the caption “Plan of Distribution” of the Prospectus constitute the only information furnished by or on behalf of the Placement Agents to the Fund for purposes of Section 4(r) and this Section 11.
If any action is brought against the Fund, the Advisor or any such person in respect of which indemnity may be sought against the Placement Agents pursuant to the foregoing paragraph, the Fund, the Advisor or such person shall promptly notify the Placement Agents in writing of the institution of such action, and the Placement Agents, shall assume the defense of such action, including the employment of counsel and payment of expenses; provided, however, that any failure or delay to so notify the Placement Agents will not relieve the Placement Agents of any obligation hereunder, except to the extent that the Placement Agents’ ability to defend is actually impaired by such failure or delay. The Fund, the Advisor or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Fund, the Advisor or such person unless the employment of such counsel shall have been authorized in writing by Ladenburg in connection with the defense of such action or Ladenburg shall not have employed counsel to have charge of the defense of such action within a reasonable time after delivery of notice of such action or such indemnified party or parties shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different from or additional to those available to the Placement Agents (in which case the Placement Agents shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by Placement Agents and paid as incurred (it being understood, however, that the Placement Agents shall not be liable for the expenses of more than one separate firm of attorneys in any one action or series of related actions in the same jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action).
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(c) If the indemnification provided for in this Section 11 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) and (b) of this Section 11 in respect of any losses, expenses, liabilities, damages or claims referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, expenses, liabilities, damages or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Fund, the Advisor and the Placement Agents from the sale of the Placement Securities or (ii) if (but only if) the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Fund, the Advisor and of the Placement Agents in connection with the statements or omissions which resulted in such losses, expenses, liabilities, damages or claims, as well as any other relevant equitable considerations. The relative benefits received by the Fund and the Placement Agents shall be deemed to be in the same respective proportion as the total proceeds from the offering (net of Placement Agents’ fees but before deducting expenses) received by the Fund and the total fees received by the Placement Agents, bear to the aggregate offering price of the Common Shares. The relative fault of the Fund, the Advisor and of the Placement Agents shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Fund, the Advisor or by the Placement Agents and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any claim or action.
(d) The Fund, the Advisor and each Placement Agent agree that it would not be just and equitable if contribution pursuant to this Section 11 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in subsection (c)(i) and, if applicable, subsection (c)(ii), above. Notwithstanding the provisions of this Section 11, the Placement Agents shall not be required to contribute any amount in excess of the respective fees received by each Placement Agent. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(e) No party shall be entitled to indemnification under this Section 11 if such indemnification of such party would violate Section 17(i) of the 1940 Act.
SECTION 12. Survival. The indemnity and contribution agreements contained in Section 11 and the covenants, warranties and representations of the Fund contained in Section 4 and Section 6 of this Agreement and the warranties and representations of the Advisor contained in Section 4, Section 5 and Section 6 shall remain in full force and effect regardless of any investigation made by or on behalf of a Placement Agent, or any person who controls such Placement Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the respective directors, officers, employees and agents of a Placement Agent or by or on behalf of the Fund, its trustees and officers, or any person who controls the Fund within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement, the sale and delivery of the Common Shares pursuant to terms of this Agreement. The Fund and each Placement Agent agree promptly to notify the others of the commencement of any litigation or proceeding against it and, in the case of the Fund, against any of the Fund’s officers and trustees, in connection with the sale and delivery of the Common Shares pursuant to the terms of this Agreement, or in connection with the Registration Statement or the Prospectus.
SECTION 13. Duties. Nothing in this Agreement shall be deemed to create a partnership, joint venture or agency relationship between the parties. The Placement Agents undertake to perform such duties
28
and obligations only as expressly set forth herein. Such duties and obligations of the Placement Agents with respect to the sale of the Placement Securities shall be determined solely by the express provisions of this Agreement, and the Placement Agents shall not be liable except for the performance of such duties and obligations with respect to the sale of the Placement Securities as are specifically set forth in this Agreement. The Fund acknowledges and agrees that: (i) any activity that the Placement Agents may undertake or have undertaken in furtherance of the sale of the Placement Securities, including any purchase and sale of the Common Shares pursuant to this Agreement, either before or after the date hereof, is an arm’s-length commercial transaction between the Fund, on the one hand, and the Placement Agents, on the other hand, and the Fund is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with each transaction contemplated hereby and the process leading to such transaction each Placement Agent is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary of the Fund or its affiliates, shareholders, creditors or employees or any other party; (iii) each Placement Agent has not assumed or will not assume an advisory, agency or fiduciary responsibility in favor of the Fund with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether a Placement Agent has advised or is currently advising the Fund on other matters); and (iv) each Placement Agent and its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Fund and that each Placement Agent has no obligation to disclose any of such interests. The Fund acknowledges that each Placement Agent disclaims any implied duties (including any fiduciary duty), covenants or obligations arising from each Placement Agent’s performance of the duties and obligations expressly set forth herein. The Fund hereby waives and releases, to the fullest extent permitted by law, any claims that the Fund may have against each Placement Agent with respect to any breach or alleged breach of agency or fiduciary duty.
SECTION 14. Notices. Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to Ladenburg shall be directed to Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, if to ▇. ▇▇▇▇▇ Securities, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, if to ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇; if to the Fund, shall be sufficient in all respects if delivered to the Fund at the offices of the Fund at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, with a copy to Dechert LLP, ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; if to the Advisor, shall be sufficient in all respects if delivered to the Advisor at the offices of the Advisor at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with a copy to Dechert LLP, ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
SECTION 15. Governing Law; Headings. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.
SECTION 16. Parties at Interest. The Agreement herein set forth has been and is made solely for the benefit of the Placement Agents, each of the Fund, the Advisor and the controlling persons, trustees, directors and officers referred to in Section 11 and Section 12 hereof, and their respective successors, assigns, executors and administrators. No other person, partnership, association or corporation shall acquire or have any right under or by virtue of this Agreement.
29
SECTION 17. Counterparts and Facsimile Signatures. This Agreement may be signed by the parties in counterparts which together shall constitute one and the same agreement among the parties. An electronic signature shall constitute an original signature for all purposes.
[Remainder of Page Intentionally Left Blank]
30
If the foregoing correctly sets forth the understanding among the Fund and the Advisor on the one hand, and the Placement Agents on the other, please so indicate in the space provided below for the purpose, whereupon this Agreement shall constitute a binding agreement among the Fund and the Advisor on the one hand, and the Placement Agents on the other.
| Very truly yours, | ||
| CARLYLE CREDIT INCOME FUND | ||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | |
| Title: | Chief Executive Officer | |
| CARLYLE GLOBAL CREDIT INVESTMENT MANAGEMENT L.L.C. | ||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Title: | Managing Director and Deputy Chief Investment Officer | |
[Signature Page to the Equity Distribution Agreement]
| Accepted and agreed to as of the date first above written: | ||
| Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. | ||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Title: | Managing Director | |
| ▇. ▇▇▇▇▇ Securities, Inc. | ||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Name: | ▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Title: | Managing Director | |
| ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. | ||
| By: | /s/ ▇▇ ▇▇▇▇▇▇ | |
| Name: | ▇▇ ▇▇▇▇▇▇ | |
| Title: | Managing Director | |
[Signature Page to the Equity Distribution Agreement]
Schedule 1
Registration Statement on Form N-2 (File Nos. 333-272426 and 811-22554), filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 5, 2023, as amended on July 17, 2023, September 1, 2023 and September 28, 2023 by pre-effective amendments, declared effective by the SEC on September 29, 2023.
Exhibit A
Form of Placement Notice
| From: | [ ] | |
| To: | [ ] | |
| Cc: | [ ] | |
| Date: | [ ], 20[ ] | |
| Subject: | Equity Distribution—Placement Notice | |
Ladies and Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Equity Distribution Agreement by and among Carlyle Credit Income Fund (the “Fund”), Carlyle Global Credit Investment Management L.L.C., Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc., ▇. ▇▇▇▇▇ Securities, Inc. and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. (collectively, the “Placement Agents”) dated October 4, 2023 (the “Agreement”), I hereby request on behalf of the Fund that the Placement Agents sell up to [ ] shares of beneficial interest (the “Placement Securities”) at a minimum market price of $[ ] per share.
The time period during which sales are requested to be made shall be [ ].
No more than [ ] shares may be sold in any one trading day.
[ADDITIONAL SALES PARAMETERS MAY BE ADDED, SUCH AS SPECIFIC DATES THE SHARES MAY NOT BE SOLD ON, THE MANNER IN WHICH SALES ARE TO BE MADE BY PLACEMENT AGENTS, AND/OR THE CAPACITY IN WHICH PLACEMENT AGENTS MAY ACT IN SELLING SHARES (AS PRINCIPAL, AGENT, OR BOTH)]
Sincerely,
[ ]
Exhibit B
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
| ▇▇▇▇▇▇ ▇▇▇▇▇▇ | ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇ | ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇ ▇▇▇▇▇ | ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ |
▇. ▇▇▇▇▇ Securities, Inc.
| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇▇ ▇▇▇▇▇▇▇▇ | ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ |
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
| ▇▇▇▇▇ ▇▇▇▇▇ | ▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇ | |
| ▇▇ ▇▇▇▇▇▇ | ▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇ | ▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇ | |
| ▇▇▇▇ ▇▇▇▇▇▇ | ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇ |
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇▇▇▇ ▇▇▇▇▇▇ | ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇▇▇▇ ▇▇▇▇▇ | ▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ | |
| ▇▇▇▇ ▇▇▇▇▇▇▇▇ | ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ |
Exhibit C
Compensation
The amount of any discount, commission or other compensation, exclusive of any expense reimbursement, to be paid by the Fund to the Applicable Placement Agent shall be equal to the lesser of (i) 2.00% of the gross sales price per share from the sale of Placement Securities and (ii) the difference between the gross sale price per share from such sale of Placement Securities and the Fund’s most recently determined net asset value per share, with respect to any Placement Securities sold through the Applicable Placement Agent under the Equity Distribution Agreement.
Exhibit D-1
Opinion of Dechert LLP
[See attached.]
Exhibit D-2
Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
[See attached.]
EXHIBIT E-1
OFFICER’S CERTIFICATE
[DATE]
Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, the duly elected, qualified, and acting Chief Executive Officer of Carlyle Credit Income Fund, a Delaware statutory trust (the “Fund”), and ▇▇▇▇▇▇ ▇▇▇▇▇▇, the duly elected, qualified, and acting Chief Financial Officer of the Fund, do hereby certify on behalf of the Fund pursuant to Section 9(a) of the Equity Distribution Agreement dated as of October 4, 2023 (the “Equity Distribution Agreement”) by and among the Fund, Carlyle Global Credit Investment Management L.L.C., a Delaware limited liability company, Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. (“Ladenburg”), ▇. ▇▇▇▇▇ Securities, Inc. (“▇. ▇▇▇▇▇”) and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. (“▇▇▇▇▇▇▇▇▇▇▇” and, together with Ladenburg and ▇. ▇▇▇▇▇, the “Placement Agents”) as the placement agents, that:
| 1. | The representations and warranties of the Fund as set forth in the Equity Distribution Agreement in Section 4 are true and correct on and as of the date hereof, with the same force and effect as if expressly made on and as of the date hereof. |
| 2. | The Fund has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the Equity Distribution Agreement at or prior to the date hereof. |
| 3. | No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the Securities Act. |
| 4. | Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been (a) any Material Adverse Change, (b) any transaction that is material to the Fund, except transactions entered into in the ordinary course of business, (c) any change in the capital stock or outstanding indebtedness of the Fund that is material to the Fund, (d) any dividend or distribution of any kind declared, paid or made on the capital stock of the Fund, or (e) any loss or damage (whether or not insured) to the property of the Fund which has been sustained or will have been sustained which has a Material Adverse Effect. |
Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Equity Distribution Agreement.
Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Placement Agents, and Dechert LLP, counsel to the Fund, is authorized to rely on this certificate in connection with opinions each such firm is rendering pursuant to the Equity Distribution Agreement.
(Signature page follows)
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first written above.
| CARLYLE CREDIT INCOME FUND | ||
| By: |
| |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ | |
| Title: | Chief Executive Officer | |
| By: |
| |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Title: | Chief Financial Officer | |
EXHIBIT E-2
CARLYLE GLOBAL CREDIT INVESTMENT MANAGEMENT L.L.C.
OFFICER CERTIFICATE
[DATE]
I, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the duly elected, qualified, and acting Managing Director and Deputy Chief Investment Officer of Carlyle Global Credit Investment Management L.L.C., a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisor”), do hereby certify on behalf of the Advisor pursuant to Section 9(a) of the Equity Distribution Agreement dated as of October 4, 2023 (the “Equity Distribution Agreement”) by and among the Carlyle Credit Income Fund, a Delaware statutory trust, the Advisor, and Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. (“Ladenburg”), ▇. ▇▇▇▇▇ Securities, Inc. (“▇. ▇▇▇▇▇”) and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. (“▇▇▇▇▇▇▇▇▇▇▇” and, together with Ladenburg and ▇. ▇▇▇▇▇, the “Placement Agents”), as the placement agents, that:
| 1. | The representations and warranties of the Advisor in Sections 4 and 5 of the Equity Distribution Agreement are true and correct on and as of the date hereof, with the same force and effect as if expressly made on and as of the date hereof. |
| 2. | The Advisor has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the Equity Distribution Agreement at or prior to the date hereof. |
Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Placement Agents, and Dechert LLP, counsel to the Fund, is authorized to rely on this certificate in connection with opinions each such firm is rendering pursuant to the Equity Distribution Agreement.
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Equity Distribution Agreement.
(Signature page follows)
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first written above.
| CARLYLE GLOBAL CREDIT INVESTMENT MANAGEMENT L.L.C. | ||
| By: |
| |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Title: | Managing Director and Deputy Chief Investment Officer | |
EXHIBIT E-3
SECRETARY’S CERTIFICATE
[DATE]
I, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, the duly elected, qualified and acting Secretary of Carlyle Credit Income Fund, a Delaware statutory trust (the “Fund”), do hereby certify, in such capacity and not in an individual capacity, that:
| 1. | I am the duly appointed, qualified and presently incumbent Secretary of the Fund; I am familiar with the facts herein certified and duly authorized to certify the same, and make this Certificate in connection with the Equity Distribution Agreement dated as of October 4, 2023 (the “Equity Distribution Agreement”) by and among the Fund, Carlyle Global Credit Investment Management L.L.C., a Delaware limited liability company (the “Adviser”), and Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. (“Ladenburg”), ▇. ▇▇▇▇▇ Securities, Inc. (“▇. ▇▇▇▇▇”) and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. (“▇▇▇▇▇▇▇▇▇▇▇” and, together with Ladenburg and ▇. ▇▇▇▇▇, the “Placement Agents”), as the placement agents. |
| 2. | Attached hereto as Exhibit A is (i) a true, correct and complete copy, certified by the appropriate authority of the State of Delaware, of the Certificate of Trust of the Fund, as amended, and (ii) a true, correct and complete copy of the Amended and Restated Declaration of Trust (the “Declaration of Trust”) of the Fund dated July 14, 2023, as in full force and effect on the date hereof. No further amendment or other modification to such Declaration of Trust has been authorized and no action has been taken by the Fund or its shareholders, trustees, or officers in contemplation of any such amendment. |
| 3. | Attached hereto as Exhibit B is a true, correct and complete copy of the Amended and Restated By-laws (the “Bylaws”) of the Fund, as in full force and effect on the date hereof. No amendment or other document relating to or affecting the Bylaws has been taken by the Fund or its shareholders, trustees or officers since the adoption of the Bylaws and no action has been taken by the Fund or its shareholders, trustees, or officers in contemplation of any amendment to or modification of the Bylaws after the date hereof. |
| 4. | Attached hereto as Exhibit C is a true, correct and complete copy of the Investment Advisory Agreement, dated July 14, 2023 (the “Investment Advisory Agreement”), between the Fund and the Adviser, which was duly authorized, executed and delivered by the Fund. |
| 5. | Attached hereto as Exhibit D are true, correct and complete copies of all resolutions adopted by the Board of Trustees of the Fund (the “Board”) at a meeting or by written consent, as the case may be, relating to, among other things: (i) approving the filing of the Registration Statement on Form N-2 (File Nos. 333-272426 and 811-22554) (the “Registration Statement”); (ii) approving the issuance and sale of up to $75,000,000 of Common Shares; (iii) approving the execution and delivery of the Equity Distribution Agreement; and (iv) all other resolutions relating to the offering in connection with the Equity Distribution Agreement; the resolutions have not been amended, modified or rescinded and remain in full force and effect on the date hereof; such resolutions are the only resolutions adopted by the Board relating to the offering in connection with the Equity Distribution Agreement and/or the Registration Statement. |
| 6. | The minute books and records of the Fund relating to all proceedings of the shareholders and the Board and all committees thereof made available to Dechert LLP, counsel to the Fund (“Dechert”), and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Placement Agents (“Katten”), are the original minute books and records of the Fund, or are true and correct copies thereof, complete in all material respects. The documents of the corporation made available to Dechert and Katten in connection with their due diligence review of the Fund were true and correct in all material respects. There have been no material changes, additions or alterations in said minute books and records nor any changes to any documents outside the ordinary course of the Fund’s business, whether or not such minute books, records or documents were disclosed or provided to Dechert and Katten in writing. |
| 7. | Each of (i) the Registration Statement, (ii) the Equity Distribution Agreement and (iii) the Investment Advisory Agreement is substantially in the form presented to and approved by the Board. Such approval has not been amended, modified or rescinded and remains in full force and effect. |
| 8. | No proceeding for the liquidation, merger, consolidation or dissolution of the Fund, or for the sale, lease or other transfer of all or substantially all of its assets, is pending or, to my knowledge, is contemplated by the Fund. |
| 9. | Each person who, as an officer or trustee of the Fund, signed the Registration Statement, the Equity Distribution Agreement, the Investment Advisory Agreement and any other certificates or other papers delivered to the Securities and Exchange Commission, and any other certificate or document delivered prior hereto or on the date hereof by the Fund in connection with the offering described in the Equity Distribution Agreement was validly elected to, and incumbent of, the office he or she purported to hold at the time of such execution, delivery and issuance and the signature of such person appearing on such document is his or her genuine signature. The signature set forth in Exhibit E is the authentic signature of each such officer listed in such Exhibit. |
| 10. | Dechert and Katten are each entitled to rely upon this Secretary’s Certificate in connection with any opinions given in connection with the transactions contemplated by the Equity Distribution Agreement. |
Capitalized terms not defined herein shall have the meanings assigned to such terms in the Equity Distribution Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, I have executed this Certificate as of the date first written above.
| By: |
| |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
| Title: | Secretary |
EXHIBIT E-4
CARLYLE GLOBAL CREDIT INVESTMENT MANAGEMENT L.L.C.
SUPPLEMENTAL OFFICER’S CERTIFICATE
[DATE]
I, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, the duly elected, qualified, and acting Global Credit Chief Legal Officer of Carlyle Global Credit Investment Management L.L.C., a Delaware limited liability company (the “Adviser”), do hereby certify, in such capacity and not in an individual capacity, on behalf of the Adviser in connection with the Equity Distribution Agreement, dated as of October 4, 2023 (the “Equity Distribution Agreement”) by and among Carlyle Credit Income Fund, a Delaware statutory trust (the “Fund”), the Adviser, and Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. (“Ladenburg”), ▇. ▇▇▇▇▇ Securities, Inc. (“▇. ▇▇▇▇▇”) and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. (“▇▇▇▇▇▇▇▇▇▇▇” and, together with Ladenburg and ▇. ▇▇▇▇▇, the “Placement Agents”), as the placement agents, that:
| 1. | The Certificate of Formation of the Adviser, filed with the Secretary of State of the State of Delaware on February 8, 2012, attached hereto as Annex A, is a true and complete copy of the Certificate of Formation of the Adviser, as amended to date, and said Certificate of Formation is in full force and effect as of the date hereof and has not been modified or supplemented as of the date hereof, nor has any action been taken in furtherance of any such modifications or supplements. |
| 2. | No proceedings looking toward the liquidation or dissolution of the Adviser have been taken or are pending, nor has the member of the Adviser taken any steps to authorize or institute any of the foregoing. |
| 3. | The Limited Liability Company Agreement attached hereto as Annex B is a true and complete copy of the Limited Liability Company Agreement of the Adviser, as amended to date, and said Limited Liability Company Agreement is in full force and effect as of the date hereof and has not been modified or supplemented as of the date hereof, nor has any action been taken in furtherance of any such modifications or supplements. |
| 4. | Attached hereto as Annex C are true, complete and correct copies of resolutions duly adopted by the managing member of the Adviser; such resolutions have not been amended, modified or rescinded and remain in full force and effect; and such resolutions are the only resolutions adopted by the Adviser’s managing member relating to the Equity Distribution Agreement. |
| 5. | The Adviser is duly registered with the Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended. |
| 6. | The following person is a duly elected, qualified and acting officer of the Adviser holding the offices set forth opposite his name below, has the limited liability company authorization to act on behalf of the Adviser in such capacities and to execute and deliver the Equity Distribution Agreement and all documents and instruments executed and delivered in connection therewith, and the signature set forth opposite each name is the authentic signature of such officer: |
| Name |
Title |
Signature | ||
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | Managing Director and Deputy Chief Investment Officer | (See attached) |
| 7. | Each person who, as an officer of the Adviser, signed the Equity Distribution Agreement, the Investment Advisory Agreement, dated July 14, 2023, between the Fund and the Adviser, or any other document delivered in connection with the issuance by the Fund was duly elected or appointed, qualified and acting as such officer at the respective times of the signing and delivery thereof and was duly authorized to sign such document on behalf of the Adviser, and the signature of each such person appearing on each such document is the genuine signature of such officer. |
| 8. | Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Placement Agents, and Dechert LLP, counsel to the Fund, is authorized to rely on this certificate in connection with opinions each such firm is rendering pursuant to the Equity Distribution Agreement: |
Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Equity Distribution Agreement.
[Signature Page Follows]
5
IN WITNESS WHEREOF, I have executed this Certificate as of the date first written above.
| CARLYLE GLOBAL CREDIT INVESTMENT MANAGEMENT L.L.C. | ||
| By: |
| |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
| Title: | Global Credit Chief Legal Officer | |
[Signature Page to Supplemental Officer’s Certificate of the Adviser – Equity Distribution Agreement]
Carlyle Global Credit Investment Management L.L.C.
Incumbency Certificate
| Name |
Title |
Signature | ||
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
Managing Director and Deputy Chief Investment Officer |
|||
EXHIBIT F
CARLYLE CREDIT INCOME FUND
CHIEF FINANCIAL OFFICER’S CERTIFICATE
[DATE]
I, ▇▇▇▇▇▇ ▇▇▇▇▇▇, certify that I am the Chief Financial Officer of Carlyle Credit Income Fund (the “Fund”), I am familiar with the accounting, financial operations and financial records of the Fund and I am authorized to execute this Chief Financial Officer’s Certificate on behalf of the Fund.
| 1. | I have reviewed the Fund’s unaudited semi-annual financial statements and financial highlights as of and for the semi-annual period ended March 31, 2023 included in the Fund’s semi-annual report on Form N-CSRS (the “Semi-Annual Financial Statements”) and for purposes of this certification, have inquired of other officials of the Fund, as necessary, who have responsibility for certain financial matters. |
| 2. | Nothing has come to my attention based on my review of the Semi-Annual Financial Statements and my inquiries of other Fund officials as stated above, that causes me to believe that: |
| a. | any material modifications should be made to the Semi-Annual Financial Statements for them to be in conformity with accounting principles generally accepted in the United States of America; and |
| b. | the Semi-Annual Financial Statements do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, and the rules and regulations adopted thereunder by the Securities and Exchange Commission. |
| 3. | I have reviewed the financial information circled in Exhibit A attached hereto and, to the best of my knowledge and based on my familiarity with the Fund’s accounting, operations and records systems, such disclosures are true and accurate and are based on the most recently available records of the Fund and for purposes of this certification, have inquired of other officials of the Fund, as necessary, who have responsibility for certain financial matters. |
[Signature Page Follows]
IN WITNESS WHEREOF, I have executed this Certificate as of the date first written above.
| By: |
| |
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Title: | Chief Financial Officer |