Item 1.01 - Entry into a Material Definitive Agreement
New Distribution and Sub-Placement Agent Agreements
Reaves Utility Income Fund (NYSE American: UTG) (the
“Fund”) has entered into a distribution agreement (the “Distribution Agreement”), dated September 19, 2022, with
Paralel Distributors LLC (“Paralel Distributors”), pursuant to which the Fund may offer and sell up to 8,000,000 common shares
of beneficial interest, no par value (“Common Shares”), from time to time through Paralel Distributors in transactions deemed
to be “at the market” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Offering”).
The Offering is being made pursuant a prospectus supplement,
dated November 24, 2021 and the accompanying prospectus, also dated November 24, 2021, each of which constitute part of the Fund’s
effective shelf registration statement on Form N-2 (File No. 333-261328) previously filed with the Securities and Exchange Commission
(the “Registration Statement”). Under the Investment Company Act of 1940, as amended, the Fund may not sell any Common Shares
at a price below the current net asset value of such common shares, exclusive of any distributing commission or discount.
Under the Distribution Agreement, Paralel Distributors
may enter into sub-placement agent agreements with one or more selected dealers. Paralel Distributors has entered into a sub-placement
agent agreement, dated September 19, 2022 (the “Sub-Placement Agent Agreement”), with UBS Securities LLC (“UBS”)
relating to the Common Shares to be offered under the Distribution Agreement.
Pursuant to the Distribution Agreement, the Fund will
compensate Paralel Distributors with respect to sales of Common Shares at a commission rate of 1.00% of the gross proceeds of the sale
of Common Shares. Out of this commission, under the Sub-Placement Agent Agreement, Paralel Distributors will compensate UBS at a rate
of up to 0.80% of the gross sales proceeds of the sale of the Common Shares sold by UBS.
The Distribution Agreement replaces the
materially similar distribution agreement between the Fund and ALPS Distributors, Inc. (“ADI”), dated November 14, 2019,
as amended on October 6, 2020, June 21, 2021 and November 22, 2021 (collectively, the “Prior ADI Agreement”). The
Distribution Agreement and Prior ADI Agreement contain materially similar terms except for the parties to the agreements, number of Common
Shares offered for sale and effective date. The Sub-Placement Agent Agreement replaces the materially similar sub-placement agent
agreement between ADI and UBS, dated November 14, 2019, as amended on August 12, 2020, October 6, 2020, June 21, 2021 and November
22, 2021 (“Prior SPA Agreement”). The Sub-Placement Agent Agreement and Prior SPA Agreement contain materially similar
terms except for the parties to the agreements, number of Common Shares offered for sale, and effective date.
Under the Prior ADI Agreement and Prior SPA Agreement,
the Fund could offer and sell up to 23,000,000 Common Shares from time to time through ADI and UBS, respectively. From the date of the
commencement of the Offering, November 24, 2021, through September 16, 2022, 5,077,802 Common Shares have been sold through ADI and
UBS in the Offering. From November 14, 2019 through September 16, 2022, 22,026,485 Common Shares have been sold through ADI and UBS
in aggregate in the Offering and a prior “at the market” offering. Each of the Prior ADI Agreement and Prior SPA Agreement
are terminated effective September 19, 2022.
Paralel Distributors’ principal business address
is 1700 Broadway, Suite 1230, Denver, Colorado 80290, which, beginning September 19, 2022, is also the address at which shareholders may
request a free copy of the prospectus supplement, accompanying prospectus, statement of additional information, or the Fund’s annual
and semi-annual reports.
The foregoing descriptions of the Distribution Agreement
and the Sub-Placement Agent Agreement do not purport to be complete and are qualified in their entirety by reference to the full text
of the Distribution Agreement filed with this report as Exhibit 1.1 and incorporated herein by reference, and the full text of the Sub-Placement
Agent Agreement filed with this report as Exhibit 1.2 and incorporated herein by reference.
New Administration and Accounting Agreement
The Fund has entered into a new administration and
fund accounting agreement (the “Paralel Agreement”) with Paralel Technologies LLC (“Paralel”) pursuant to which
Paralel will begin serving as the Fund’s administrator effective September 19, 2022. Paralel will replace the Fund’s current
administrator, ALPS Fund Services, Inc. (“ALPS”), effective September 19, 2022. Paralel’s principal business address is 1700
Broadway, Suite 1230, Denver, Colorado 80290 and is the parent company of Paralel Distributors.
The Paralel Agreement is materially similar to
the Fund’s administration and fund accounting agreement with ALPS (the “ALPS Administration Agreement”), except
with respect to the fees, effective date, parties to the agreements, and certain marketing services provided. Pursuant to the
Paralel Agreement, Paralel will provide the Fund with fund accounting, tax, fund administration, and compliance services, providing
the Fund with certain executive officers, and generally managing the business affairs of the Fund. These services are materially
similar to those provided by ALPS under the ALPS Administration Agreement, except that in addition to those listed above, Paralel (itself
or through its affiliates) also agrees to provide secondary market support to the Fund up to a specified amount in the Paralel
Agreement .
The Paralel Agreement provides that from its fees
earned, Paralel will pay all expenses incurred by the Fund with the exception of advisory fees; taxes and governmental fees; expenses
related to portfolio transactions and management of the portfolio; expenses associated with secondary offerings of shares; trustee fees
and expenses; expenses associated with tender offers and other share repurchases; and other extraordinary expenses. For these services,
Paralel is entitled to receive a monthly fee at the annual rate of 0.15% on the first $2 billion of the average daily total assets of
the Fund and 0.10% on any amount in excess of $2 billion of the average daily total assets of the Fund. Under the ALPS Administration
Agreement, for its services, ALPS was entitled to receive a monthly fee at the annual rate of 0.265% on the first $2.5 billion of the
average daily total assets of the Fund and 0.240% on any amount in excess of $2.5 billion of the average daily total assets of the Fund.
From its fees, ALPS paid all expenses incurred by the Fund, except for certain exceptions that are materially similar to those described
above under the Paralel Agreement. The ALPS Administration Agreement is terminated effective September 19, 2022.
The foregoing description of the Paralel Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Paralel Agreement filed with this
report as Exhibit 1.3 and incorporated herein by reference.