COMMITTED LENDING AGREEMENT
--------------------------------------------------------------------------------
The Bank of Nova Scotia, acting through its Houston branch ("SCOTIA") and the
counterparty specified on the signature page ("CUSTOMER"), hereby enter into
this Committed Lending Agreement (this "AGREEMENT"), dated as of the date
specified on the signature page.
Whereas Scotia and Customer have entered into the Lending Services Agreement,
dated as of the date hereof (the "LENDING SERVICES AGREEMENT");
Whereas Scotia, Customer and The Bank of New York Mellon ("CUSTODIAN") have
entered into the Special Custody and Pledge Agreement, dated as of November 1,
2013 (the "SPECIAL CUSTODY AGREEMENT" and together with this Agreement and the
Lending Services Agreement, the "LOAN AGREEMENTS"); and
Whereas this Agreement supplements and forms part of the Loan Agreements and
sets out the terms of the commitment of Scotia to provide cash loans to Customer
under the Loan Agreements.
Now, therefore, in consideration of the foregoing promises and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS -
(a) Capitalized terms not defined in this Agreement have the respective
meanings assigned to them in the Lending Services Agreement.
(b) "ASSET COVERAGE RATIO" means the ratio of (i) the aggregate value of
Customer's assets less current liabilities to (ii) the Customer's
total debt outstanding.
(c) "COLLATERAL REQUIREMENTS" shall have the meaning specified in
Appendix A attached hereto.
(d) "COMMITMENT TERM" shall be the number of days specified in Appendix
B attached hereto.
(e) "MAXIMUM LOAN AMOUNT" shall be, as of the date of this Agreement,
the amount specified in Appendix B attached hereto.
(f) "NET ASSET VALUE" means, as of the relevant date, the USD equivalent
of the net asset value of the Customer determined in accordance with
generally accepted accounting principles in the United States of
America for balance sheet purposes.
(g) "NET ASSET VALUE PER SHARE" means the amount determined by dividing
the Net Asset Value by the number of outstanding shares issued by
the Customer.
(h) "OUTSTANDING CASH LOANS" means the aggregate cash borrowings under
the Loan Agreements. For the purposes of calculating such aggregate
cash borrowings, if Customer holds debit cash balances in non-USD
currencies, Scotia will convert each of these balances into USD at
prevailing market rates to determine Customer's aggregate cash
borrowings.
(i) "1940 ACT" means the Investment Company Act of 1940, as amended.
2. BORROWINGS -
Subject to the terms hereof and provided that: (i) a Commitment
Termination Event has not occurred and is continuing, (ii) an event which
1
would constitute a Commitment Termination Event, but for the passage of
time, has not occurred, or (iii) compliance with a Borrowing (as defined
below) would: (a) cause a Commitment Termination Event to occur; (b)
result in the Outstanding Cash Loans exceeding the Maximum Loan Amount, or
(c) create a margin or collateral delivery obligation for the Customer
hereunder, Scotia shall make available cash financing under the Loan
Agreements (each, a "BORROWING") in an aggregate amount (including any
other outstanding Borrowings) up to the Maximum Loan Amount. If a
Borrowing request is received by Scotia: (i) on or before 12:00 p.m. (EST)
on a Business Day (the "BORROW REQUEST DATE"), then Scotia shall make such
cash financing available as of the 4:00 p.m. New York time on the next
Business Day, and (ii) after 12:00 p.m. New York time on a Borrow Request
Date, then Scotia shall make such cash financing available by 11:00 a.m.
New York time on the second (2'') Business Day following such Borrow
Request Date. If Scotia is unable to loan or transfer any such amounts
pursuant to a restriction, as identified in this Section 2 or Section
16(a), Scotia shall notify the Customer of such restriction as soon as
reasonably practical, but in any event no later than 4:00 p.m. New York
time on the first Business Day following the Business Day Scotia received
the Financing Request. Customer may borrow under this Section 2, prepay
pursuant to Section 4 and reborrow under this Section 2 without penalty.
3. REPAYMENT -
Upon the occurrence of a Commitment Termination Event, an event described
in Section 16(a) hereof, or the date specified in the Facility
Modification Notice as described in Section 6, all Borrowings (including
all accrued and unpaid interest thereon and all other amounts owing or
payable hereunder) may be recalled by Scotia and shall be due and payable
in accordance with the provisions of Section 2 of the Lending Services
Agreement.
4. PREPAYMENTS -
Customer may, upon written notice to Scotia stating the proposed date and
aggregate principal amount of the prepayment, prepay all or any portion of
the outstanding principal amount of Borrowings outstanding, together with
the interest accrued up to the date of such prepayment on the principal
amount prepaid; provided that Customer shall continue to be obligated to
pay the Commitment Fee as set forth in Appendix B.
5. INTEREST -
Customer shall pay interest on the aggregate amount of any Borrowings
outstanding from the date of the relevant Borrowing until such principal
amount has been paid in full, at the rates specified in Appendix B
attached hereto. Such interest shall accrue at the rate specified in
Appendix B attached hereto and shall be payable monthly, and if not paid
when due, any unpaid interest shall be capitalized on the principal
balance as additional cash borrowing by the Customer.
6. SCOPE OF COMMITTED FACILITY-
Subject to Section 7, Scotia may not take any of the following actions
except on or after the day that is a number of days equal to the
Commitment Term immediately following delivery of notice of such
termination to Customer by Scotia (the "FACILITY MODIFICATION NOTICE"):
(a) modify Appendix A;
(b) recall or cause repayment of any cash loans under the Loan
Agreements; provided that, if, on any day, the Outstanding Cash
Loans exceed the Maximum Loan Amount (the amount of such excess, the
"LOAN EXCESS"), Scotia may recall cash loans with a principal
balance not to exceed the Loan Excess and such loans shall be due
and payable in accordance with the provisions of Section 2 of the
Lending Services Agreement;
2
(c) modify the interest rate spread on cash loans under the Loan
Agreements, as set forth in Appendix B attached hereto; provided
that, Scotia may modify the interest rate spread with respect to
Borrowings with a principal amount up to any Loan Excess;
(d) modify any other fees, charges or expenses (the "FEES"), provided
that Scotia may modify any Fees immediately if the amount of such
Fees charged to Scotia, as the case may be, have been increased by
the provider of the relevant services;
(e) terminate this Agreement or any of the Loan Agreements; or
(f) modify the Lending Service Agreement during the term of this
Agreement without prior consent of Customer.
7. CONDITIONS FOR COMMITTED FACILITY-
The commitment as set forth in Sections 2 and 6 only applies so long as-
(a) Customer satisfies the Collateral Requirements;
(b) no Commitment Termination Event has occurred; and
(c) no termination of this Agreement has occurred (including, without
limitation, pursuant to Section 13 or Section 16).
8. ARRANGEMENT AND COMMITMENT FEES -
Customer shall pay when due a Commitment Fee as set forth in Appendix B.
For the avoidance of doubt, the requirement to pay the fees in accordance
with this Section 8 shall constitute an Obligation under the Lending
Services Agreement.
9. SUBSTITUTION -
(a) After Scotia sends a Facility Modification Notice, Customer may not
substitute any collateral, provided that Scotia may permit
substitutions upon request which permission may not be unreasonably
withheld;
(b) Prior to Scotia sending a Facility Modification Notice, Customer
may, subject to the Special Custody Agreement, substitute
collateral.
10. COLLATERAL DELIVERY-
If notice of a Collateral Requirement is sent to Customer: (i) on or
before 12:00 p.m. New York time on any Business Day, then Customer shall
deliver all required Collateral no later than the 4:00p.m. New York time
on such Business Day, and (ii) after 12:00 p.m. New York time on any
Business Day, then Customer shall deliver all required Collateral no later
than 11:00 a.m. New York time on the immediately succeeding Business Day.
For the avoidance of doubt, the requirement to deliver Collateral in
accordance with this Section 10 shall constitute an Obligation under the
Lending Services Agreement.
11. REPRESENTATIONS AND WARRANTIES -
Customer hereby makes all the representations, warranties and covenants
set forth in Sections 10 and 11 of the Lending Services Agreement, which
are deemed to refer to this Agreement, and such representations,
warranties and covenants shall survive each transaction and the
termination of the Loan Agreements.
3
12. FINANCIAL INFORMATION-
Customer shall provide Scotia with copies of-
(a) within 30 days after the last day of each calendar month, a
statement of total assets and performance and a calculation of the
Net Asset Value per Share and Asset Coverage Ratio as of the
relevant calendar month end in a form reasonably satisfactory to
Scotia; provided that publication of such information on the
Customer's website, XXXxxxxxxxxx.xxx shall constitute delivery for
purposes of this Section 12; and
(b) as soon as available and in any event within 120 days after the end
of each fiscal year of the Customer a statement of assets and
liabilities and a calculation of the Net Asset Value per Share of
the Customer as at their fiscal year end, including a disclosure of
total assets, as of the end of such fiscal year, and the related
financial staiements for such fiscal year prepared in accordance
with United States generally accepted accounting principles,
together with an audit report issued by an independent public
accounting firm; provided that publication of such information on
the Customer's website, XXXxxxxxxxxx.xxx, shall constitute delivery
for purposes of this Section.
For the avoidance of doubt, the requirement to deliver the information in
accordance with this Section 12 shall constitute an Obligation under the
Lending Services Agreement.
13. TERMINATION-
(a) Upon the occurrence of a Commitment Termination Event, Scotia shall
have the right to terminate this Agreement, accelerate the maturity
of any and all Borrowings to be immediately due and payable, modify
Appendix A and modify any interest rate spread, fees, charges, or
expenses, in each case, in accordance with the time frames specified
in the Lending Services Agreement; provided that, Scotia shall be
deemed to have waived the occurrence of the Commitment Termination
Event and its rights to exercise (i) any rights or remedies
described herein or (ii) any other rights or remedies in connection
with this Agreement that arise solely as a result of the relevant
Commitment Termination Event, in each case, with respect to a
particular occurrence of a Commitment Termination Event, unless
Scotia has taken any action described in this Section 13(a) within
15 calendar days after the date on which Scotia is provided written
notice followed by electronic mail notification to the address
provided by Scotia of the occurrence of such Commitment Termination
Event specifically referencing such occurrence as a Commitment
Termination Event and requesting a waiver.
(b) Each of the following events constitutes a "COMMITMENT TERMINATION
EVENT":
i. the occurrence of a repudiation, misrepresentation, material
breach or the occurrence of a default, termination event or
similar condition (howsoever characterized, which, for the
avoidance of doubt, includes the occurrence of an Additional
Termination Event under an ISDA Master Agreement) by Customer
under any contract or agreement with Scotia or any affiliate
of Scotia, which has resulted in (after giving effect to any
applicable notice requirement or grace period) any amounts
under any such agreement becoming, or becoming capable at such
time of being declared due and payable before it would
otherwise have been due and payable;
ii. Customer fails to make any filing necessary to comply with the
rules of any exchange in which its shares are listed;
iii. Customer is no longer classified as a "closed-end company" as
defined in Section 5 of the 1940 Act;
4
iv. Custodian's long-term credit rating declines below either (i)
BBB+ by S&P or (ii) Baa1 by Xxxxx'x (a "CUSTODIAN DOWNGRADE
EVENT") and Customer fails to transfer the Collateral to an
alternative custodian acceptable to Scotia in its sole
discretion within 30 days after the occurrence of such
Custodian Downgrade Event;
v. the Customer fails to comply in any material respect with the
investment policies, strategies, guidelines and restrictions
set forth in its disclosure documents, trust agreement,
constituent documentations or investment management agreements
in effect as of the date hereof (the foregoing policies,
strategies, guidelines and restrictions being hereinafter
referred to as the "INVESTMENT POLICIES");
vi. the Customer materially changes the Investment Policies
without the prior written consent of Party A (consent not to
be unreasonably withheld);
vii. there occurs any change in any applicable law or regulation
(or the interpretation thereof) including, without limitation,
tax legislation, the Bank Act (Canada), securities
legislation, or the issuance of any order, judgment, ruling,
administrative guideline or policy of or by any court,
governmental authority, administrative or regulatory body or
tribunal of competent jurisdiction, in each case that would,
in the reasonable opinion of Scotia, either: (a) prohibit
Scotia or the Customer from performing its obligations
hereunder, or render any such obligation unlawful, or (b)
result in this Agreement and the Lending Services Agreement
becoming, or being materially less profitable either on a
percentage or absolute basis for Scotia or materially
adversely affects the capital or tax treatment accorded Scotia
in respect of this Agreement and the Lending Services
Agreement, unless the Customer agrees to compensate Scotia for
any such losses or costs, in writing, in a form reasonably
acceptable to Scotia within thirty (30) days of Scotia's
notice to the Customer of any such changes;
viii. If the Customer fails to deliver any statement required to be
delivered pursuant to Section 12 of this Agreement within five
5 Business Days after the Customer's receipt of written notice
of such failure from Scotia;
ix. The Customer: (a) defaults under the Lending Services
Agreement; or (b) defaults under any other agreement of a
financial nature, including but not limited to any loan
agreement, credit agreement, derivative agreement, margin
agreement, option agreement, forward agreement, swap
agreement, repurchase or reverse repurchase agreement,
securities lending agreement, any agreement in respect of
transactions similar to the aforementioned transactions, or
any other agreements in respect of a transaction which
currently is, or in the future becomes recurrently entered
into in the financial markets, in each case between the
Customer and Scotia or any affiliate of Scotia which has
resulted in (after giving effect to any applicable notice
requirement or grace period) any amounts under any such
agreement becoming, or becoming capable at such time of being
declared due and payable before it would otherwise have been
due and payable;
x. Either Energy Income Partners LLC or First Trust Advisors L.P.
ceases to be the investment sub-advisor or the investment
manager (respectively) of the Customer or ceases to have
authority over the trading and investment activities of the
Customer (including, without limitation, the authority to
exercise all rights of the Customer under the MLPA) as such
entity had upon the execution of this Agreement (if any)
unless such entity is replaced by an investment sub-advisor or
an investment manager (respectively) acceptable to Scotia;
xi. the Customer's Asset Coverage Ratio is less than 3.00:1.00 at
any time; or
xii. the Customer incurs any indebtedness at any time, other than
(a) the indebtedness incurred under the Loan Agreements, (b)
5
indebtedness with respect to derivative obligations incurred
in the ordinary course of business and (c) indebtedness to the
Custodian incurred for the purpose of clearing and settling
purchases and sales of SECURITIES.
(c) Customer may terminate this Agreement at any time immediately
following delivery of notice to Scotia.
14. [RESERVED] -
15. NOTICES -
Notices under this Agreement shall be provided pursuant to Section 17(a)
of the Lending Services Agreement.
16. COMPLIANCE WITH APPLICABLE LAW-
(a) Notwithstanding any of the foregoing, if required by Applicable Law-
i. the Scotia Entities may terminate any Loan Agreement and any
Contract;
ii. Scotia may recall any outstanding cash loan under the Loan
Agreements;
iii. Scotia may modify the method for calculating the Collateral
Requirements; and
iv. the Scotia Entities may take any other action as required by
Applicable Law.
(b) This Agreement will not limit the ability of Scotia to amend or
modify this Agreement or any other Loan Agreement or change the
product provided under this Agreement and the Loan Agreements as
necessary to comply with Applicable Law, provided that upon becoming
aware of any such restrictions, scotia shall advise the customer and
scotia and the Customer shall negotiate in good faith revised terms
as close as possible to the existing terms in this Agreement, the
result of which would not result in Scotia violating any laws or
regulations applicable to it.
(c) The Scotia Entities may exercise any remedies permitted under the
Contracts if Customer fails to comply with Applicable Law.
17. MISCELLANEOUS-
(a) In the event of a conflict between any provision of this Agreement
and the other Loan Agreements, this Agreement prevails.
(b) This Agreement is governed by and construed in accordance with the
laws of the State of New York, without regard to the conflict of
laws rules (other than Section 5-1401 of the General Obligations
Law).
(c) Section 20(d) of the Lending Services Agreement is hereby
incorporated by reference in its entirety and shall be deemed to be
a part of this Agreement to the same extent as if such provision had
been set forth in full herein.
(d) This Agreement may be executed in counterparts, each of which will
be deemed an original instrument and all of which together will
constitute one and the same agreement.
(e) The other Scotia Entities are express third party beneficiaries of
this Agreement.
(f) The contents and terms in this Agreement are confidential and shall
not be disclosed to any third party (nor shall any public
announcement relating to this Agreement be made by either party),
except for such information (1) as is, or may become generally
available to
6
the public, (2) as may be required to be disclosed in order to
enforce or comply with the terms of this Agreement or the Lending
Services Agreement; or (3) as may be required or appropriate in
response to any summons, subpoena, or otherwise in connection with
any litigation or to comply with any applicable law, order,
regulation, ruling or accounting disclosure rule or standard.
Notwithstanding the foregoing, either party may disclose the terms
of this Agreement to those of its employees, officers, directors,
affiliates, agents, representatives and advisors who need to know
such information in order to assist such party in complying with or
enforcing its rights and obligations under this Agreement and the
Lending Services Agreement. The provisions of this Section 17(f)
shall not apply to any disclosure by Customer of the contents and
terms of the Agreement to any direct or indirect investor or
prospective investor in the Customer or to the Customer's
administrator.
(g) The Customer's Declaration of Trust is on file with the Secretary to
the Commonwealth of Massachusetts. This document is executed on
behalf of the Customer by the Customer's officers as officers and
not individually and the obligations imposed upon the Customer by
this Agreement are not binding upon any of the Customer's trustees,
officers or shareholders individually but are binding only upon the
assets and property of the Customer.
(The remainder of this page is blank.)
7
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of November 1, 2013.
FIRST TRUST MLP AND ENERGY INCOME FUND
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: PRESIDENT AND CEO
THE BANK OF NOVA SCOTIA, ACTING
THROUGH ITS HOUSTON BRANCH
By:
------------------------------
Name:
Title:
8
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of November 1, 2013.
FIRST TRUST MLP AND ENERGY INCOME FUND
By:
------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, ACTING
THROUGH ITS HOUSTON BRANCH
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director - Operations
8
APPENDIX A - COLLATERAL REQUIREMENTS
--------------------------------------------------------------------------------
THIS APPENDIX forms a part of the Committed Lending Agreement entered into
between The Bank of Nova Scotia, acting through its Houston Branch ("SCOTIA")
and FIRST TRUST MLP AND ENERGY INCOME FUND ("CUSTOMER") (the "COMMITTED LENDING
AGREEMENT").
1. COLLATERAL REQUIREMENT -
The "COLLATERAL REQUIREMENTS" with respect to all positions held in the accounts
established pursuant to the Lending Services Agreement (each a "POSITION"),
shall be equal to the higher of (a) the sum of (i) the product of (A) 50% and
(B) the aggregate Gross Market Value of all Positions in the Eligible Portfolio,
(ii) the product of (A) 50% and (B) the aggregate Gross Market Value of all
Overage Positions and (iii) the aggregate Gross Market Value of all Positions
which are not Eligible Securities, and (b) the requirements as per Regulation U
of the Board of Governors of the Federal Reserve System, as amended from time to
time.
2. ELIGIBLE SECURITIES -
(a) Equity Securities covered under the Committed Lending Agreement
("ELIGIBLE EQUITY SECURITIES") must:
(i) be traded on any of Toronto Stock Exchange, TSX Venture
Exchange, New York Stock Exchange, NYSE MKT or NASDAQ; and
(ii) when aggregated with all other positions of the same Equity
Security beneficially owned by Customer and its affiliates
(whether with Scotia or otherwise), not result in Customer and
its affiliates becoming the beneficial owner, directly or
indirectly, of more than nine (9) percent of the outstanding
shares of such Equity Security.
(b) Debt Securities covered under the Committed Lending Agreement
("ELIGIBLE DEBT SECURITIES" and together with Eligible Equity
Securities, "ELIGIBLE SECURITIES") must:
(i) be issued in a Developed Market; and
(ii) be rated at least B- by S&P and B3 by Xxxxx'x.
(c) Notwithstanding the foregoing, the following will not be part of the
commitment in the Committed Lending Agreement and shall not be
Eligible Securities:
(i) any security that is not capable of being valued by Scotia on
a daily basis through its internal or external pricing
sources;
(ii) any security type not covered clause (a) or (b) above, as
determined by Scotia in its sole discretion;
(iii) any short security position;
(iv) any security offered through a private placement or any
restricted securities (excluding, for the purposes of this
subclause, corporate debt or preferred securities offered
under Rule 144A of the Securities Act of 1933, as amended);
(v) any preferred security;
(vi) any position that has a Country of Risk that is not a
Developed Market;
(vii) any commodity positions;
(viii any exchange-traded-funds that represent leveraged or short
exposure to their reference index or sector;
(ix) any derivatives (including, without limitation, warrants);
(x) any securities that are municipal securities, asset-backed
securities, mortgage securities, Payment-in-Kind Securities or
Structured Securities (notwithstanding the fact that such
securities would otherwise be covered), which, for the
avoidance of doubt, shall not include any depository receipts;
(xi) to the extent that any Aggregate Position in an Equity
Security has a Days of Trading Volume in excess of 7, the
portion of such Aggregate Position in excess of 7 Days of
Trading Volume;
(xii) to the extent that any Aggregate Position in an Equity
Security represents more than 4% of the outstanding shares of
such Equity Security, the portion of such Aggregate Position
in excess of such 4% threshold; and
(xiii) to the extent that any Aggregate Position in a Debt Security
has a Percentage of Issue Size greater than 10%, the portion
of such Aggregate Position in excess of such 10% threshold.
(d) After excluding any securities pursuant to Section 2(c), at any time
of determination ("TIME X"), to the extent that the Gross Market
Value of any Issuer Position exceeds 15% of the Gross Market Value
of all Positions in the Eligible Portfolio at Time X, Scotia may
select a portion of such Issuer Position which shall not be Eligible
Securities (the "INELIGIBLE PORTION") such that the Gross Market
Value of such Issuer Position following the exclusion of the
Ineligible Portion ("TIME Y") does not exceed 15% of the Gross
Market Value of all Positions in the Eligible Portfolio at Time X
(for the avoidance of doubt, the Ineligible Portion shall be
considered part of the Eligible Portfolio for purposes of
determining the Gross Market Value of all Positions in the Eligible
Portfolio at Time X).
3. PORTFOLIO CONSTRAINTS -
The following constraints shall apply to all Positions comprised of
Eligible Securities:
(a) To the extent that the Gross Market Value of Positions in the
Eligible Portfolio with a Global Industry Classification Standard
sector other than Energy or Utilities exceeds 15% of the Gross
Market Value of the Eligible Portfolio, the portion of such
Positions in excess of such 15% threshold shall be deemed Overage
Positions
(b) To the extent that the Gross Market Value of Debt Securities
Positions in the Eligible Portfolio exceeds 20% of the Gross Market
Value of the Eligible Portfolio, the portion of such Positions in
excess of such 20% threshold shall be deemed Overage Positions; and
(c) To the extent that the Weighted Average Days of Trading Volume of
Equity Securities Positions (other than a money market fund) in the
Eligible Portfolio exceeds 3, Scotia shall select Aggregate
Positions with Days of Trading Volume in excess of 3 which shall be
deemed Overage Positions such that the Weighted Average Days of
Trading Volume of Equity Securities Positions other than Overage
Positions in the Eligible Portfolio does not exceed 3.
2
4. POSITIONS OUTSIDE THE SCOPE OF THIS APPENDIX -
For the avoidance of doubt, the Collateral Requirement set forth herein is
limited to the types and sizes of securities specified herein. The
Collateral Requirement for any Position or portion of a Position not
covered by the terms of this Appendix shall be determined by Scotia in its
sole discretion.
5. ONE-OFF COLLATERAL REQUIREMENTS -
From time to time Scotia, in its sole discretion, may agree to a lower
Collateral Requirement than the Collateral Requirement determined pursuant
to this Appendix for a particular Position; provided that, for the
avoidance of doubt, the commitment set forth in Section 2 of the Committed
Lending Agreement shall apply only with respect to the Collateral
Requirement determined pursuant to Sections 1 and 3 hereof and Scotia
shall have the right at any time to increase the Collateral Requirement
for such Position up to the Collateral Requirement that would be required
pursuant to Sections 1 and 3 hereof.
6. CERTAIN DEFINITIONS -
(a) "AFFILIATE" means, in relation to any issuer, (i) any entity
controlled, directly or indirectly, by the issuer, (ii) any entity
that controls, directly or indirectly, the issuer, (iii) any entity
directly or indirectly under common control with the issuer, or (iv)
any entity otherwise deemed to be related to, or under common
management with or by the issuer, as determined by Scotia in its
reasonable discretion. For this purpose, "control" of any entity or
person means ownership of a majority of the voting power of the
entity or person. Upon receipt of a written request by the Customer,
Scotia will identify those entities that it deems to be an Affiliate
of an issuer pursuant to sub-section (iv) of this definition.
Notwithstanding the foregoing, provided that the Customer has
provided Scotia with evidence of (x) or (y) below using either an
entity's most recent: (a) audited consolidated year-end financial
statements; or (b) quarterly financial statements (such most recent
statement being the "STATEMENT"), an entity will not be considered
to: (x) be 'controlled' either directly or indirectly by an issuer,
if such entity's assets and its earnings, represent less than eighty
percent (80%) of the issuer's consolidated assets and earnings, as
applicable, as set out in the issuer's Statement; or (y) 'control'
directly or indirectly an issuer, if such issuer's assets and its
earnings, represent less than eighty percent (80%) of the entity's
consolidated assets and earnings, as applicable, as set out in such
entity's Statement.
If insufficient information is provided in the Statements in respect
of assets for the purposes of (x) and (y) above, earnings alone may
be used. When Customer provides evidence of (x) or (y) above, such
evidence will be valid for up to 1 year. Scotia may require Customer
to provide new evidence when the relevant entity issues financial
statements or commences corporate actions.
(b) "AGGREGATE POSITION" means all Positions in the same security.
(c) "BLOOMBERG" means the Bloomberg Professional Service.
(d) "COUNTRY OF RISK" means a country to which a security has
significant economic, legal or political exposure as determined by
Scotia.
3
(e) "CURRENT MARKET VALUE" means, with respect to a Position, an amount
equal to the product of (i) number of the relevant security and (ii)
the price per security of the relevant security (as determined by
Scotia in its sole discretion). To the extent any Positions are
quoted in a currency other than USD, Scotia shall convert such quote
into USD at a rate determined by Scotia in its sole discretion.
(f) "DAYS OF TRADING VOLUME" means, with respect to an Equity Security,
an amount equal to the quotient of (i) the number of shares of such
for all Positions of such security and (ii) the 30-day average daily
trading volume of such security as published by Bloomberg.
Notwithstanding the preceding sentence, to the extent that the
30-day average daily trading volume for a particular Equity Security
is unavailable on any day, the "Days of Trading Volume" shall be
determined by Scotia in its sole discretion.
(g) "DEBT SECURITY" means any convertible or non-convertible bond. For
the avoidance of doubt, "Debt Security" shall not include any
preferred or convertible preferred securities.
(h) "DEVELOPED MARKET" means any of U.S., Canada, France, Germany,
Italy, Japan, United Kingdom, Spain, Austria, Belgium, Czech
Republic, Denmark, Finland, Ireland, Luxembourg, The Netherlands,
and Portugal.
(i) "ELIGIBLE PORTFOLIO" means all Positions in Eligible Securities.
(j) "EQUITY SECURITY" means any listed common stock share, exchange
traded fund, master limited partnership interest, Canadian income
trust, money market fund or similar security as determined by Scotia
in its sole discretion.
(k) "GROSS MARKET VALUE" means, with respect to one or more Positions,
an amount equal to the sum of the Current Market Value of all such
Positions.
(l) "ISSUER" means the issuer of a security or any Affiliate of the
issuer, as determined by Scotia; provided that, with respect to any
exchange-traded funds, the Issuer of such securities shall be the
index to which the relevant securities relate, if any.
(m) "ISSUER POSITION" means all Positions in Eligible Securities issued
by the same Issuer.
(n) "MOODY'S" means Xxxxx'x Investor Service, Inc.
(o) "OVERAGE POSITION" means any Position deemed to be an Overage
Position in accordance with Section 3 hereof.
(p) "PAYMENT-IN-KIND SECURITY" means any security that permits the
Issuer to pay the holder of such security with additional securities
or assets in place of cash. ( q) "PERCENTAGE OF ISSUE SIZE" means,
with respect to any Debt Security Aggregate Position, the quotient
of (i) the Gross Market Value of such Aggregate Position and (ii)
the aggregate market value of all such Debt Security issued and
still outstanding.
(r) "POSITION WEIGHT" means, with respect to an Aggregate Position in an
Eligible Equity Security, the quotient of (i) the Gross Market Value
of such Aggregate Position and (ii) the Gross Market Value of all
Positions in Eligible Equity Securities.
(s) "S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
4
(t) "STRUCTURED SECURITY" means any security which provides a payment to
the holder linked to a different security issued by a different
issuer.
(u) "WEIGHTED AVERAGE DAYS OF TRADING VOLUME" means, with respect to an
Aggregate Position in an Eligible Equity Security, the product of
(i) the Days of Trading Volume with respect to such Aggregate
Position and (ii) the Position Weight of such Aggregate Position.
5
APPENDIX B - PRICING AND COMMITMENT TERM
--------------------------------------------------------------------------------
THIS APPENDIX forms a part of the Committed Lending Agreement entered into
between The Bank of Nova Scotia, acting through its Houston Branch ("SCOTIA")
and First Trust MLP and Energy Income Fund ("CUSTOMER") (the "COMMITTED LENDING
AGREEMENT").
--------------------------------------------------------------------------------
CUSTOMER DEBIT RATE
--------------------------------------------------------------------------------
1-month USD LIBOR + 65 bps
--------------------------------------------------------------------------------
MAXIMUM LOAN AMOUNT
--------------------------------------------------------------------------------
USD $350,000,000
--------------------------------------------------------------------------------
COMMITMENT TERM
--------------------------------------------------------------------------------
180 calendar days
--------------------------------------------------------------------------------
COMMITMENT FEE
--------------------------------------------------------------------------------
Customer shall pay a commitment fee (the "COMMITMENT FEE") to Scotia equal to
sum of the Daily Commitment Fees over the relevant calculation period on the
first Business Day of each month.
"APPLICABLE FEE" means, as of any day: (a) if the current Outstanding Cash Loans
is greater than 50% of the current Maximum Loan Amount, zero; and (b) otherwise,
the difference between (i) the Maximum Loan Amount and (ii) the current
Outstanding Cash Loans.
"DAILY COMMITMENT FEE" means, as of any day, the product of (a) the Applicable
Fee, (b) 1/360 and (c) 15 bps.
