Exhibit (k)(7)
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FORM
OF
AUCTION AGENT AGREEMENT
between
XXXXX XXXXX CREDIT OPPORTUNITIES FUND
and
DEUTSCHE BANK TRUST COMPANY AMERICAS
Dated as of [_____], 2006
Relating to
AUCTION PREFERRED SHARES
SERIES A
of
XXXXX XXXXX CREDIT OPPORTUNITIES FUND
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TABLE OF CONTENTS
Page
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1. DEFINITIONS AND RULES OF CONSTRUCTION............................... 1
1.1 Terms Defined by Reference to the Amended By-laws.............. 1
1.2 Terms Defined Herein........................................... 1
1.3 Rules of Construction.......................................... 3
2. THE AUCTION......................................................... 4
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures....................................... 4
2.2 Preparation for Each Auction; Maintenance of Registry of
Existing Holders............................................ 4
2.3 Auction Schedule............................................... 7
2.4 Submission Processing Representation........................... 8
2.5 Notice of Auction Results...................................... 8
2.6 Broker-Dealers................................................. 8
2.7 Ownership of Shares of APS and Submission of Bids by the Fund
and its Affiliates.......................................... 9
2.8 Access to and Maintenance of Auction Records................... 10
3. THE AUCTION AGENT AS PAYING AGENT................................... 10
3.1 The Paying Agent............................................... 10
3.2 The Fund's Notices to the Paying Agent......................... 11
3.3 The Fund to Provide Funds for Dividends and Redemptions........ 11
3.4 Disbursing Dividends and Redemption Price...................... 11
4. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.................... 12
4.1 Original Issue of Stock Certificates........................... 12
4.2 Registration of Transfer or Exchange of Shares................. 12
4.3 Removal of Legend.............................................. 12
4.4 Lost, Stolen or Destroyed Stock Certificates................... 12
4.5 Disposition of Canceled Certificates; Record Retention......... 12
4.6 Stock Register................................................. 13
4.7 Return of Funds................................................ 13
5. REPRESENTATIONS AND WARRANTIES...................................... 14
5.1 Representations and Warranties of the Fund..................... 14
5.2 Representations and Warranties of the Auction Agent............ 15
6. THE AUCTION AGENT................................................... 15
6.1 Duties and Responsibilities.................................... 15
6.2 Rights of the Auction Agent.................................... 15
6.3 Auction Agent's Disclaimer..................................... 16
6.4 Compensation, Expenses and Indemnification..................... 16
7. MISCELLANEOUS....................................................... 17
7.1 Term of Agreement.............................................. 17
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7.2 Communications................................................. 17
7.3 Entire Agreement............................................... 18
7.4 Benefits....................................................... 18
7.5 Amendment; Waiver.............................................. 19
7.6 Successors and Assigns......................................... 19
7.7 Severability................................................... 19
7.8 Execution in Counterparts...................................... 19
7.9 Governing Law.................................................. 19
7.10 Limitation of Liability........................................ 19
ii
THIS AUCTION AGENT AGREEMENT, dated as of _____________ , 2006, is between
XXXXX XXXXX CREDIT OPPORTUNITIES FUND, a Massachusetts business trust (the
"Fund"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking
corporation.
The Fund proposes to issue 3,250 preferred shares of beneficial interest,
par value $.01 per share, liquidation preference $25,000 per share, designated
Series A Auction Preferred Shares (the "APS"), pursuant to the Fund's Amended
By-laws (as defined below). The Fund desires that Deutsche Bank Trust Company
Americas perform certain duties as agent in connection with each Auction of
shares of APS (in such capacity, the "Auction Agent"), and as the transfer
agent, registrar, dividend disbursing agent and redemption agent with respect to
the shares of APS (in such capacity, the "Paying Agent"), upon the terms and
conditions of this Agreement, and the Fund hereby appoints Deutsche Bank Trust
Company Americas as said Auction Agent and Paying Agent in accordance with those
terms and conditions (hereinafter generally referred to as the "Auction Agent,"
except in Sections 3 and 4 below).
The Fund desires that Deutsche Bank Trust Company Americas perform certain
duties as agent in connection with each Auction of shares of APS (in such
capacity, the "Auction Agent"), and as the transfer agent, registrar, dividend
disbursing agent and redemption agent with respect to the shares of APS (in such
capacity, the "Paying Agent"), upon the terms and conditions of this Agreement,
and the Fund hereby appoints Deutsche Bank Trust Company Americas as said
Auction Agent and Paying Agent in accordance with those terms and conditions
(hereinafter generally referred to as the "Auction Agent," except in Sections 3
and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Fund and the Auction Agent agree as follows:
1. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Amended By-laws.
Capitalized terms not defined herein shall have the respective meanings
specified in the Amended By-laws.
1.2 Terms Defined Herein.
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As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context otherwise
requires:
(1) "Affiliate" shall mean any Person made known to the Auction Agent to be
controlled by, in control of, or under common control with, the Fund or its
successors.
(2) "Agent Member" of any Person shall mean such Person's agent member of
the Securities Depository that will act on behalf of a Bidder.
(3) "Amended By-laws" shall mean the Amended By-laws of the Fund,
establishing the powers, preferences and rights of the APS, as amended to the
date hereof.
(4) "Auction" shall have the meaning specified in Section 2.1 hereof.
(5) "Auction Procedures" shall mean the Auction Procedures that are set
forth in Section 10 of Article VII of the Amended By-laws.
(6) "Authorized Officer" shall mean each Director, Vice President,
Assistant Vice President and Associate of the Auction Agent and every other
officer or employee of the Auction Agent designated as an "Authorized Officer"
for purposes hereof in a communication to the Fund.
(7) "Broker-Dealer Agreement" shall mean each agreement between the Auction
Agent and a Broker-Dealer substantially in the form attached hereto as Exhibit
A.
(8) "Fund Officer" shall mean the Chairman and Chief Executive Officer, the
President, each Vice President (whether or not designated by a number or word or
words added before or after the title "Vice President"), the Secretary, the
Treasurer, each Assistant Secretary and each Assistant Treasurer of the Fund and
every other officer or employee of the Fund designated as a "Fund Officer" for
purposes hereof in a notice from the Fund to the Auction Agent.
(8) "Holder" shall be a holder of record of one or more shares of APS,
listed as such in the stock register maintained by the Paying Agent pursuant to
Section 4.6 hereof.
(9) "Settlement Procedures" shall mean the Settlement Procedures attached
as Exhibit A to the Broker-Dealer Agreement.
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(10) "Submission Deadline" shall mean 1:00 p.m. eastern time, on any
Auction Date or such other time on any Auction Date by which the Broker-Dealers
are required to submit Orders to the Auction Agent as specified by the Auction
Agent from time to time.
(11) "Submission Processing Deadline" shall mean the earlier of (i) 40
minutes after the Submission Deadline and (ii) the time when the Auction Agent
begins to disseminate the results of the Auction to the Broker-Dealers.
(12) "Submission Processing Representation" shall have the meaning
specified in Section 2.4 hereof.
1.3 Rules of Construction.
Unless the context or use indicates another or different meaning or intent,
the following rules shall apply to the construction of this Agreement:
(1) Words importing the singular number shall include the plural number and
vice versa.
(2) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(3) The words "hereof," "herein," "hereto," and other words of similar
import refer to this Agreement as a whole.
(4) All references herein to a particular time of day shall be to New York
City time.
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2. THE AUCTION.
2.1 Purpose; Incorporation by Reference of Auction Procedures and Settlement
Procedures.
(1) The Amended By-laws provide that the Applicable Rate on shares of APS
for each Dividend Period therefor after the Initial Dividend Period shall be the
rate per annum that a commercial bank, trust company or other financial
institution appointed by the Fund advises results from implementation of the
Auction Procedures. The Board of Trustees of the Fund has adopted a resolution
appointing Deutsche Bank Trust Company Americas as Auction Agent for purposes of
the Auction Procedures. The Auction Agent hereby accepts such appointment and
agrees that, on each Auction Date, it shall follow the procedures set forth in
this Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate for the APS for the next Dividend Period therefor. Each periodic
operation of such procedures is hereinafter referred to as an "Auction."
(2) All of the provisions contained in the Auction Procedures and in the
Settlement Procedures are incorporated herein by reference in their entirety and
shall be deemed to be a part hereof to the same extent as if such provisions
were set forth fully herein.
2.2 Preparation for Each Auction; Maintenance of Registry of Existing Holders.
(1) Pursuant to Section 2.6 hereof, the Fund shall not designate any Person
to act as a Broker-Dealer without the prior written approval of the Auction
Agent (which approval shall not be withheld unreasonably). As of the date
hereof, the Fund shall provide the Auction Agent with a list of the
Broker-Dealers previously approved by the Auction Agent and shall cause to be
delivered to the Auction Agent for execution by the Auction Agent a
Broker-Dealer Agreement signed by each such Broker-Dealer. The Auction Agent
shall keep such list current and accurate and shall indicate thereon, or on a
separate list, the identity of each Existing Holder, if any, whose most recent
Order was submitted by a Broker-Dealer on such list and resulted in such
Existing Holder continuing to hold or purchasing shares of APS. Prior to any
Auction Date for which any change in such list of Broker-Dealers is to be
effective, the Fund shall notify the Auction Agent in writing of such change
and, if any such change is the addition of a Broker-Dealer to such list, the
Fund shall cause to be delivered to the Auction Agent for execution by the
Auction Agent a Broker-Dealer Agreement signed by such Broker-Dealer. The
Auction Agent shall have entered into a Broker-Dealer Agreement with each
Broker-Dealer prior to the participation of any such Broker-Dealer in any
Auction.
(2) In the event that the Auction Date for any Auction shall be changed
after the Auction Agent shall have given the notice referred to in clause (vii)
of Paragraph (a) of the Settlement
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Procedures, the Auction Agent, by such means as the Auction Agent deems
practicable, shall give notice of such change to the Broker-Dealers not later
than the earlier of 9:15 A.M. on the new Auction Date or 9:15 A.M. on the old
Auction Date.
(3) The provisions contained in Section 2 of Article VII of the Amended
By-laws concerning Special Dividend Periods and the notification of a Special
Dividend Period will be followed by the Fund and, to the extent applicable, the
Auction Agent, and the provisions contained therein are incorporated herein by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions were set forth fully herein.
(4) On each Auction Date, the Auction Agent shall determine the Reference
Rate and the Maximum Applicable Rate. If the Reference Rate is not quoted on an
interest basis but is quoted on a discount basis, the Auction Agent shall
convert the quoted rate to an Interest Equivalent, as set forth in Section 1 of
the Amended By-laws; or, if the rate obtained by the Auction Agent is not quoted
on an interest or discount basis, the Auction Agent shall convert the quoted
rate to an interest rate after consultation with the Fund as to the method of
such conversion. Not later than 9:30 A.M. on each Auction Date, the Auction
Agent shall notify the Fund and the Broker-Dealers of the Reference Rate so
determined and of the Maximum Applicable Rate.
(5)(i) If the Reference Rate is the applicable "AA" Financial Composite
Commercial Paper Rate and such rate is to be based on rates supplied by
Commercial Paper Dealers and one or more of the Commercial Paper Dealers shall
not provide a quotation for the determination of the applicable "AA" Financial
Composite Commercial Paper Rate, the Auction Agent immediately shall notify the
Fund so that the Fund can determine whether to select a Substitute Commercial
Paper Dealer or Substitute Commercial Paper Dealers to provide the quotation or
quotations not being supplied by any Commercial Paper Dealer or Commercial Paper
Dealers. The Fund promptly shall advise the Auction Agent of any such selection.
If the Fund does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, then the rates shall be supplied by the
remaining Commercial Paper Dealer or Commercial Paper Dealers.
(ii) If, after the date of this Agreement, there is any change in the
prevailing rating of APS by Fitch Ratings and Xxxxx'x Investors Service, Inc.
(or substitute or successor rating agencies), thereby resulting in any change in
the corresponding applicable percentage for the APS, as set forth in the
definition of Maximum Application Rate (the "Percentage"), the Fund shall notify
the Auction Agent in writing of such change in the Percentage prior to 9:00 A.M.
on the Auction Date for APS next succeeding such change. The Percentage for the
APS on the date of this Agreement is 125%. The Auction Agent shall be entitled
to rely on the last Percentage of which it has received notice from the Fund
(or, in the absence of such notice, the Percentage set
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forth in the preceding sentence) in determining the Maximum Applicable Rate as
set forth in Section 2.2(5)(i) hereof.
(iii) The Auction Agent shall maintain a current registry of the Existing
Holders of the shares of APS for purposes of the Auction. The Fund shall use its
best efforts to provide or cause to be provided to the Auction Agent on the date
of the Closing a list of the initial Existing Holders of the APS, and the
Broker-Dealer of each such Existing Holder through which such Existing Holder
purchased such shares. The Auction Agent may rely upon, as evidence of the
identities of the Existing Holders, such list, the results of each Auction and
notices from any Existing Holder, the Agent Member of any Existing Holder or the
Broker-Dealer of any Existing Holder with respect to such Existing Holder's
transfer of any shares of APS to another Person.
(iv) In the event of any partial redemption of the APS, upon notice by the
Fund to the Auction Agent of such partial redemption, the Auction Agent promptly
shall request the Securities Depository to notify the Auction Agent of the
identities of the Agent Members (and the respective numbers of shares) from the
accounts of which shares have been called for redemption and the person or
department at such Agent Member to contact regarding such redemption, and at
least two Business Days prior to the Auction preceding the date of redemption
with respect to shares of APS being partially redeemed, the Auction Agent shall
request each Agent Member so identified to disclose to the Auction Agent (upon
selection by such Agent Member of the Existing Holders whose shares are to be
redeemed) the number of shares of APS of each such Existing Holder, if any, to
be redeemed by the Fund, provided that the Auction Agent has been furnished with
the name and telephone number of a person or department at such Agent Member
from which it is to request such information. In the absence of receiving any
such information with respect to an Existing Holder, from such Existing Holder's
Agent Member or otherwise, the Auction Agent may continue to treat such Existing
Holder as having ownership of the number of shares of APS shown in the Auction
Agent's registry of Existing Holders.
(v) The Auction Agent shall register a transfer of the ownership of shares
of APS from an Existing Holder to another Existing Holder, or to another Person
if permitted by the Fund, only if (A) such transfer is made pursuant to an
Auction or (B) if such transfer is made other than pursuant to an Auction, the
Auction Agent has been notified of such transfer in writing in a notice
substantially in the form of Exhibit C to the Broker-Dealer Agreements, by such
Existing Holder or by the Agent Member of such Existing Holder. The Auction
Agent is not required to accept any notice of transfer delivered for an Auction
unless it is received by the Auction Agent by 3:00 P.M. on the Business Day next
preceding the applicable Auction Date. The Auction Agent shall rescind a
transfer made on the registry of the Existing Holders of any shares of APS if
the Auction Agent has been notified in writing, in a notice substantially in the
form of Exhibit
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D to the Broker-Dealer Agreement, by the Agent Member or the Broker-Dealer of
any Person that (i) purchased any shares of APS and the seller failed to deliver
such shares or (ii) sold any shares of APS and the purchaser failed to make
payment to such Person upon delivery to the purchaser of such shares.
(vi) The Auction Agent may request that the Broker Dealers, as set forth in
Section 3.2(c) of the Broker-Dealer Agreements, provide the Auction Agent with a
list of their respective customers that such Broker-Dealers believe are
Beneficial Owners of shares of APS. The Auction Agent shall keep confidential
any such information and shall not disclose any such information so provided to
any Person other than the relevant Broker-Dealer and the Fund, provided that the
Auction Agent reserves the right to disclose any such information if it is
advised by its counsel that its failure to do so would be unlawful.
2.3 Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with the schedule set
forth below. Such schedule may be changed by the Auction Agent with the consent
of the Fund, which consent shall not be withheld unreasonably. The Auction Agent
shall give notice of any such change to each Broker-Dealer. Such notice shall be
received prior to the first Auction Date on which any such change shall be
effective.
Time Event
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By 9:30 A.M. Auction Agent advises the Fund and the
Broker-Dealers of the Reference Rate and the Maximum
Applicable Rate as set forth in Section 2.2(5)(i)
hereof.
9:30 A.M. - 1:30 P.M. Broker-Dealers assemble information received from
each Bidder (Existing Owners or Potential Owners)
and any internally intiated Broker-Dealers' Bids in
accordance with the Auction Procedures.
Not later than Submission Auction Agent accepts any Orders submitted subject
Processing Deadline to a Submission Processing Representation and makes
determinations pursuant to Section 10(d)(i) of
Article VII of the Amended By-laws.
Not later than Auction Agent advises the Fund of the results of the
3:00 P.M. Auction as provided in Section 10(d)(ii) of Article
VII of the Amended By-laws.
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Submitted Bids and Submitted Sell Orders are
accepted and rejected in whole or in part and shares
of APS allocated as provided in Section 10(e) of
Article VII of the Amended By-laws.
Auction Agent gives notice of the Auction results as
set forth in Section 2.5 hereof.
2.4 Submission Processing Representation.
Broker-Dealers may submit an Order after the Submission Deadline and prior
to the Submission Processing Deadline if the Order was (i) received by the
Broker-Dealer from Existing Owners or Potential Owners prior to the Submission
Deadline or (ii) initiated internally by the Broker-Dealer for its own account
prior to the Submission Deadline. Each Order submitted to the Auction Agent
after the Submission Deadline and prior to the Submission Processing Deadline
shall constitute a representation by the Broker-Dealer that such order was (i)
received from an Existing Owner or Potential Owner prior to the Submission
Deadline or (ii) initiated internally by the Broker-Dealer for its own account
prior to the Submission Deadline (the "Submission Processing Representation").
2.5 Notice of Auction Results.
On each Auction Date, the Auction Agent shall notify Broker-Dealers of the
results of the Auction held on such date by telephone or through the Auction
Agent's Auction Processing System as set forth in Paragraph (a) of the
Settlement Procedures.
2.6 Broker-Dealers.
(1) Not later than 12:00 noon on each Auction Date, the Fund shall pay to
the Auction Agent in Federal Funds or similar Same-Day Funds an amount in cash
equal to (i) in the case of any Auction Date immediately preceding a 7-Day
Dividend Period, the product of (A) a fraction the numerator of which is the
number of days in such Dividend Period and the denominator of which is 360,
times (B) 1/4 of 1%, times (C) $25,000 times (D) the sum of the aggregate number
of outstanding shares of APS for which the Auction is conducted and (ii) in the
case of any Special Dividend Period, the amount determined by mutual consent of
the Fund and the Broker-Dealers pursuant to Section 3.5 of the Broker-Dealer
Agreements. The Auction Agent shall apply such moneys as set forth in Section
3.5 of the Broker-Dealer Agreements and shall thereafter remit to the Fund any
remaining funds paid to the Auction Agent pursuant to this Section 2.6(1).
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(2) The Fund shall not designate any Person to act as a Broker- Dealer, or
permit a Existing Holder or a Potential Beneficial Owner to participate in
Auctions through any Person other than a Broker-Dealer, without the prior
written approval of the Auction Agent, which approval shall not be withheld
unreasonably.
(3) The Auction Agent shall terminate any Broker-Dealer Agreement as set
forth therein if so directed by the Fund.
(4) Subject to Section 2.6(2) hereof, the Auction Agent from time to time
shall enter into such Broker-Dealer Agreements as the Fund shall request.
(5) The Auction Agent shall maintain a list of Broker-Dealers.
2.7 Ownership of Shares of APS and Submission of Bids by the Fund and its
Affiliates.
Neither the Fund nor any Affiliate of the Fund may submit any Sell Order or
Bid, directly or indirectly, in any Auction, except that an Affiliate of the
Fund that is a Broker-Dealer may submit a Sell Order or Bid on behalf of a
Beneficial Owner or a Potential Beneficial Owner. The Fund shall notify the
Auction Agent if the Fund or, to the best of the Fund's knowledge, any Affiliate
of the Fund becomes a Beneficial Owner of any shares of APS. Any shares of APS
redeemed, purchased or otherwise acquired (i) by the Fund shall not be reissued,
except in accordance with the requirements of the Securities Act of 1933, as
amended, or (ii) by its Affiliates shall not be transferred (other than to the
Fund). The Auction Agent shall have no duty or liability with respect to
enforcement of this Section 2.7.
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2.8 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Fund, its agents, independent public
accountants and counsel, access at reasonable times during normal business hours
to review and make extracts or copies (at the Fund's sole cost and expense) of
all books, records, documents and other information concerning the conduct and
results of Auctions, provided that any such agent, accountant or counsel shall
furnish the Auction Agent with a letter from the Fund requesting that the
Auction Agent afford such person access. The Auction Agent shall maintain
records relating to any Auction for a period of two years after such Auction
(unless requested by the Fund to maintain such records for such longer period
not in excess of four years, then for such longer period), and such records, in
reasonable detail, shall accurately and fairly reflect the actions taken by the
Auction Agent hereunder. The Fund agrees to keep confidential any information
regarding the customers of any Broker-Dealer received from the Auction Agent in
connection with this Agreement or any Auction, and shall not disclose such
information or permit the disclosure of such information without the prior
written consent of the applicable Broker-Dealer to anyone except such agent,
accountant or counsel engaged to audit or review the results of Auctions as
permitted by this Section 2.8, provided that the Fund reserves the right to
disclose any such information if it is advised by its counsel that its failure
to do so would (i) be unlawful or (ii) expose it to liability, unless the
Broker-Dealer shall have offered indemnification satisfactory to the Fund. Any
such agent, accountant or counsel, before having access to such information,
shall agree to keep such information confidential and not to disclose such
information or permit disclosure of such information without the prior written
consent of the applicable Broker-Dealer, provided that such agent, accountant or
counsel may reserve the right to disclose any such information if it is advised
by its counsel that its failure to do so would (i) be unlawful or (ii) expose it
to liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to such agent, accountant or counsel.
3. THE AUCTION AGENT AS PAYING AGENT.
3.1 The Paying Agent.
The Board of Trustees of the Fund has adopted a resolution appointing
Deutsche Bank Trust Company Americas as transfer agent, registrar, dividend
disbursing agent and redemption agent for the Fund in connection with any shares
of APS (in such capacity, the "Paying Agent"). The Paying Agent hereby accepts
such appointment and agrees to act in accordance with its standard procedures
and the provisions of the Amended By-laws which are specified herein with
respect to the shares of APS and as set forth in this Section 3.
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3.2 The Fund's Notices to the Paying Agent.
Whenever any shares of APS are to be redeemed, the Fund promptly shall
deliver to the Paying Agent a Notice of Redemption, which will be mailed by the
Fund to each Holder at least five Business Days prior to the date such Notice of
Redemption is required to be mailed pursuant to the Amended By-laws. The Paying
Agent shall have no responsibility to confirm or verify the accuracy of any such
Notice.
3.3 The Fund to Provide Funds for Dividends and Redemptions.
(1) Not later than noon on each Dividend Payment Date, the Fund shall
deposit with the Paying Agent an aggregate amount of Federal Funds or similar
Same-Day Funds equal to the declared dividends to be paid to Holders on such
Dividend Payment Date, and shall give the Paying Agent irrevocable instructions
to apply such funds to the payment of such dividends on such Dividend Payment
Date.
(2) If the Fund shall give a Notice of Redemption, then by noon of the date
fixed for redemption, the Fund shall deposit in trust with the Paying Agent an
aggregate amount of Federal Funds or similar Same-Day Funds sufficient to redeem
such shares of APS called for redemption and shall give the Paying Agent
irrevocable instructions and authority to pay the redemption price to the
Holders of shares of APS called for redemption upon surrender of the certificate
or certificates therefor.
3.4 Disbursing Dividends and Redemption Price.
After receipt of the Federal Funds or similar Same-Day Funds and
instructions from the Fund described in Sections 3.3(1) and (2) above, the
Paying Agent shall pay to the Holders (or former Holders) entitled thereto (i)
on each corresponding Dividend Payment Date, dividends on the shares of APS and
(ii) on any date fixed for redemption, the redemption price of any shares of APS
called for redemption. The amount of dividends for any Dividend Period to be
paid by the Paying Agent to Holders will be determined by the Fund as set forth
in Section 2 of the Amended By-laws. The redemption price to be paid by the
Paying Agent to the Holders of any shares of APS called for redemption will be
determined as set forth in Section 4 of the Amended By-laws. The Fund shall
notify the Paying Agent in writing of a decision to redeem any shares of APS on
or prior to the date specified in Section 3.2 above, and such notice by the Fund
to the Paying Agent shall contain the information required to be stated in a
Notice of Redemption required to be mailed by the Fund to such Holders. The
Paying Agent shall have no duty to
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determine the redemption price and may rely on the amount thereof set forth in a
Notice of Redemption.
4. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1 Original Issue of Stock Certificates.
On the Date of Original Issue for any share of APS, a certificate shall be
issued by the Fund and registered in the name of Cede & Co., as nominee of the
Securities Depository, and countersigned by the Paying Agent. The Fund will give
the Auction Agent prior written notice and instruction as to the issuance and
redemption of APS.
4.2 Registration of Transfer or Exchange of Shares.
Except as provided in this Section 4.2, the shares of APS shall be
registered solely in the name of the Securities Depository or its nominee.
4.3 Removal of Legend.
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing shares of APS shall be accompanied by an opinion
of counsel stating that such legend may be removed and such shares may be
transferred free of the restriction described in such legend, said opinion to be
delivered under cover of a letter from a Company Officer authorizing the Paying
Agent to remove the legend on the basis of said opinion.
4.4 Lost, Stolen or Destroyed Stock Certificates.
The Paying Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed, upon the
fulfillment of such requirements as shall be deemed appropriate by the Fund and
by the Paying Agent, subject at all times to provisions of law, the Amended
By-Laws of the Fund governing such matters and resolutions adopted by the Fund
with respect to lost, stolen or destroyed securities. The Paying Agent may issue
new certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Fund to the Paying Agent to issue a replacement
or new certificate pursuant to this Section 4.4 shall be deemed to be a
representation and warranty by the Fund to the Paying Agent that such issuance
will comply with provisions of applicable law and the By-Laws and resolutions of
the Fund.
4.5 Disposition of Canceled Certificates; Record Retention.
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The Paying Agent shall retain stock certificates which have been canceled
in transfer or in exchange and accompanying documentation in accordance with
applicable rules and regulations of the Securities and Exchange Commission for
two calendar years from the date of such cancellation. The Paying Agent, upon
written request by the Fund, shall afford to the Fund, its agents and counsel
access at reasonable times during normal business hours to review and make
extracts or copies (at the Fund's sole cost and expense) of such certificates
and accompanying documentation. Upon request by the Fund at any time after the
expiration of this two-year period, the Paying Agent shall deliver to the Fund
the canceled certificates and accompanying documentation. The Fund, at its
expense, shall retain such records for a minimum additional period of four
calendar years from the date of delivery of the records to the Fund and shall
make such records available during this period at any time, or from time to
time, for reasonable periodic, special, or other examinations by representatives
of the Securities and Exchange Commission. The Fund also shall undertake to
furnish to the Securities and Exchange Commission, upon demand, either at their
principal office or at any regional office, complete, correct and current hard
copies of any and all such records. Thereafter, such records shall not be
destroyed by the Fund without the approval of the Paying Agent, which approval
shall not be withheld unreasonably, but will be safely stored for possible
future reference.
4.6 Stock Register.
The Paying Agent shall maintain the stock register, which shall contain a
list of the Holders, the number of shares held by each Holder and the address of
each Holder. The Paying Agent shall record in the stock register any change of
address of a Holder upon notice by such Holder. In case of any written request
or demand for the inspection of the stock register or any other books of the
Fund in the possession of the Paying Agent, the Paying Agent will notify the
Fund and secure instructions as to permitting or refusing such inspection. The
Paying Agent reserves the right, however, to exhibit the stock register or other
records to any person in case it is advised by its counsel that its failure to
do so would (i) be unlawful or (ii) expose it to liability, unless the Fund
shall have offered indemnification satisfactory to the Paying Agent.
4.7 Return of Funds.
Any funds deposited with the Paying Agent by the Fund for any reason under this
Agreement, including for the payment of dividends or the redemption of shares of
APS, that remain with the Paying Agent after 12 months shall be repaid to the
Fund upon written request by the Fund.
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5. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(1) the Fund is duly organized and is validly existing as a business trust
in good standing under the laws of The Commonwealth of Massachusetts, and has
full power to execute and deliver this Agreement and to authorize, create and
issue the shares of APS;
(2) the Fund is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended, as a closed-end,
diversified, management investment company;
(3) this Agreement has been duly and validly authorized, executed and
delivered by the Fund and constitutes the legal, valid and binding obligation of
the Fund, enforceable against the Fund in accordance with its terms, subject as
to such enforceability to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and to
general equitable principles;
(4) the forms of the certificates evidencing the shares of APS comply with
all applicable laws of The Commonwealth of Massachusetts;
(5) the shares of APS have been duly and validly authorized by the Fund
and, upon completion of the initial sale of the shares of APS and receipt of
payment therefor, will be validly issued, fully paid and nonassessable;
(6) at the time of the offering of the shares of APS, the shares offered
will be registered under the Securities Act of 1933, as amended, and no further
action by or before any governmental body or authority of the United States or
of any state thereof is required in connection with the execution and delivery
of this Agreement or will be required in connection with the issuance of the
shares of APS, except such action as required by applicable state securities
laws, all of which action will have been taken;
(7) the execution and delivery of this Agreement and the issuance and
delivery of the shares of APS do not and will not conflict with, violate, or
result in a breach of, the terms, conditions or provisions of, or constitute a
default under, the Declaration of Trust or the Amended By-Laws of the Fund, any
law or regulation applicable to the Fund, any order or
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decree of any court or public authority having jurisdiction over the Fund, or
any mortgage, indenture, contract, agreement or undertaking to which the Fund is
a party or by which it is bound; and
(8) no taxes are payable upon or in respect of the execution of this
Agreement or will be payable upon or in respect of the issuance of the shares of
APS.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Fund that the Auction
Agent is duly organized and is validly existing as a banking corporation in good
standing under the laws of the State of New York, and has the corporate power to
enter into and perform its obligations under this Agreement.
6. THE AUCTION AGENT.
6.1 Duties and Responsibilities.
(1) The Auction Agent is acting solely as agent for the Fund hereunder and
owes no fiduciary duties to any Person except as provided by this Agreement.
(2) The Auction Agent undertakes to perform such duties and only such
duties as are set forth specifically in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Auction Agent.
(3) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered or omitted by it or for
any error of judgment made by it in the performance of its duties under this
Agreement. The Auction Agent shall not be liable for any error of judgment made
in good faith unless the Auction Agent shall have been negligent in ascertaining
(or failing to ascertain) the pertinent facts.
6.2 Rights of the Auction Agent.
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(1) The Auction Agent may rely upon, and shall be protected in acting or
refraining from acting upon, any communication authorized hereby and any written
instruction, notice, request, direction, consent, report, certificate, share
certificate or other instrument, paper or document reasonably believed by it to
be genuine. The Auction Agent shall not be liable for acting upon any telephone
communication authorized hereby which the Auction Agent believes in good faith
to have been given by the Fund or by a Broker-Dealer. The Auction Agent may
record telephone communications with the Fund or with the Broker-Dealers or with
both.
(2) The Auction Agent may consult with counsel of its choice, and the
written advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(3) The Auction Agent shall not be required to advance, expend or risk its
own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder. The Auction Agent shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Fund.
(4) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
6.3 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or the adequacy of
this Agreement, the Broker-Dealer Agreements or the APS.
6.4 Compensation, Expenses and Indemnification.
(1) The Fund shall pay to the Auction Agent from time to time reasonable
compensation for all services rendered by it under this Agreement and under the
Broker-Dealer Agreements as shall be set forth in a separate writing signed by
the Fund and the Auction Agent, subject to adjustments if the APS no longer are
held of record by the Securities Depository or its nominee or if there shall be
such other change as shall increase materially the Auction Agent's obligations
hereunder or under the Broker-Dealer Agreements.
(2) The Fund shall reimburse the Auction Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Auction
Agent in accordance with any provision of this Agreement and of the
Broker-Dealer Agreements (including the
16
reasonable compensation, expenses and disbursements of its agents and counsel),
except any expense, disbursement or advance attributable to its negligence or
bad faith.
(3) The Fund shall indemnify the Auction Agent for, and hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part arising out of or in connection with its agency under this Agreement
and under the Broker-Dealer Agreements, including the costs and expenses of
defending itself against any claim of liability in connection with its exercise
or performance of any of its duties hereunder and thereunder, except such as may
result from its negligence or bad faith.
7. MISCELLANEOUS.
7.1 Term of Agreement.
(1) The term of this Agreement is unlimited unless it shall be terminated
as provided in this Section 7.1. The Fund may terminate this Agreement at any
time by so notifying the Auction Agent, provided that if any APS remain
outstanding the Fund shall have entered into an agreement in substantially the
form of this Agreement with a successor auction agent. The Auction Agent may
terminate this Agreement upon prior notice to the Fund on the date specified in
such notice, which date shall be no earlier than 60 days after delivery of such
notice. If the Auction Agent resigns while any shares of APS remain outstanding,
the Fund shall use its best efforts to enter into an agreement with a successor
auction agent containing substantially the same terms and conditions as this
Agreement.
(2) Except as otherwise provided in this Section 7.1(1), the respective
rights and duties of the Fund and the Auction Agent under this Agreement shall
cease upon termination of this Agreement. The Fund's representations,
warranties, covenants and obligations to the Auction Agent under Sections 5 and
6.4 hereof shall survive the termination hereof. Upon termination of this
Agreement, the Auction Agent shall (i) resign as Auction Agent under the
Broker-Dealer Agreements, (ii) at the Fund's request, deliver promptly to the
Fund copies of all books and records maintained by it in connection with its
duties hereunder, and (iii) at the request of the Fund, transfer promptly to the
Fund or to any successor auction agent any funds deposited by the Fund with the
Auction Agent (whether in its capacity as Auction Agent or as Paying Agent)
pursuant to this Agreement which have not been distributed previously by the
Auction Agent in accordance with this Agreement.
7.2 Communications.
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Except for (i) communications authorized to be made by telephone pursuant
to this Agreement or the Auction Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in writing),
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to such
party at its address or telecopier number set forth below:
If to the Fund, Xxxxx Xxxxx Credit Opportunities Fund
addressed to: 000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
If to the Auction Agent, Deutsche Bank Trust Company Americas
addressed to: Trust and Securities Services
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Auction Rate Securities
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or such other address or telecopier number as such party hereafter may specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Fund by a Fund Officer and on
behalf of the Auction Agent by an Authorized Officer.
7.3 Entire Agreement.
This Agreement contains the entire agreement between the parties relating to the
subject matter hereof, and there are no other representations, endorsements,
promises, agreements or understandings, oral, written or inferred, between the
parties relating to the subject matter hereof, except for agreements relating to
the compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other than the
Fund, the Auction Agent and their respective successors and assigns, any benefit
of any legal or equitable right, remedy or claim hereunder.
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7.5 Amendment; Waiver.
(1) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged. The Fund shall notify the Auction Agent of any change in the Amended
By-laws prior to the effective date of any such change. If any such change in
the Amended By-laws materially increases the Auction Agent's obligations
hereunder, the Fund shall obtain the written consent to the Auction Agent prior
to the effective date of such change.
(2) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
7.6 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of the
Fund and the Auction Agent. This Agreement may not be assigned by either party
hereto absent the prior written consent of the other party, which consent shall
not be withheld unreasonably.
7.7 Severability.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8 Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be an original and all of which shall constitute but one and the same
instrument.
7.9 Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in said state.
7.10 Limitation of Liability.
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The names "Xxxxx Xxxxx Credit Opportunities Fund" and "Trustees of the
Xxxxx Xxxxx Credit Opportunities Fund" refer, respectively, to the Fund and the
Trustees of the Fund, as trustees but not individually or personally, acting
from time to time under the Fund's Agreement and Declaration of Trust dated and
filed on October 5, 2005 which is hereby referred to and a copy of which is on
file at the office of the Secretary of The Commonwealth of Massachusetts and the
principal office of the Fund. The obligations of "Xxxxx Xxxxx Credit
Opportunities Fund" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents of the Fund are made not individually, but
in such capacities, and are not binding upon any of the Trustees, officers,
holders of shares of beneficial interest of the Fund or representatives of the
Trustees personally, but bind only the Fund assets, and all persons dealing with
the Fund must look solely to the Fund property for the enforcement of any claims
against the Fund.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date first above written.
XXXXX XXXXX CREDIT OPPORTUNITIES FUND
----------------------------------------
By:
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Title:
---------------------------------
DEUTSCHE BANK TRUST COMPANY AMERICAS
----------------------------------------
By: [Xxxxx Xxxxx]
Title: Vice President
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By:
------------------------------------
Title:
---------------------------------
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