EXHIBIT (h)(4)
[FORM OF]
Xxxxx Xxxxx Credit Opportunities Fund
Auction Preferred Shares
Par Value $0.01 Per Share
UNDERWRITING AGREEMENT
August [__], 2006
UNDERWRITING AGREEMENT
August [__], 2006
UBS Securities LLC
[ ]
c/o UBS Securities LLC
as Managing Representative
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Xxxxx Xxxxx Credit Opportunities Fund, a voluntary association with
transferable shares organized and existing under and by virtue of the laws of
The Commonwealth of Massachusetts (commonly referred to as a Massachusetts
business trust) (the "Fund"), proposes to issue and sell to the underwriters
named in Schedule A annexed hereto (the "Underwriters") an aggregate of 3,250
preferred shares of beneficial interest, par value $0.01 per share, designated
Auction Preferred Shares, Series A, with a liquidation preference of $25,000 per
share (the "Shares"), of the Fund. The Shares are described in the Prospectus
which is defined below. UBS Securities LLC ("UBS Securities" or the "Managing
Representative") will act as managing representative for the Underwriters.
The Fund has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Securities Act"), and with the provisions of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder (collectively called the "Investment Company Act"), with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form N-2 (File Nos. 333- 134729 and 811-21820), including a prospectus and a
statement of additional information, relating to the Shares.
Except where the context otherwise requires, "Preliminary Prospectus,"
as used herein, means each prospectus (including the statement of additional
information incorporated therein by reference) included in such registration
statement, or amendment thereof, before it became effective under the Securities
Act and any prospectus (including the statement of additional information
incorporated therein by reference) filed with the Commission by the Fund with
the consent of the Managing Representative on behalf of the Underwriters,
pursuant to Rule 497(a) under the Securities Act.
Except where the context otherwise requires, "Registration Statement,"
as used herein, means the registration statement, as amended at the time of such
registration statement's effectiveness for purposes of Section 11 of the
Securities Act, as such section
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applies to the respective Underwriters (the "Effective Time"), including (i) all
documents filed as a part thereof or incorporated by reference therein, (ii) any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 497 under the Securities Act and deemed to be part of the
registration statement at the Effective Time pursuant to Rule 430A under the
Securities Act, and (iii) any registration statement filed to register the offer
and sale of Shares pursuant to Rule 462(b) under the Securities Act. In
addition, the Fund has filed a Notification of Registration on Form N-8A (the
"Notification") pursuant to Section 8 of the Investment Company Act. In
addition, the Fund has prepared and filed, in accordance with Section 12 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"), a registration statement (as
amended, the "Exchange Act Registration Statement") on Form 8-A (File No.
001-32870) under the Exchange Act to register, under Section 12(b) of the
Exchange Act, the class of securities consisting of the common shares of
beneficial interest, par value $0.01 per share (the "Common Shares"), of the
Fund.
Except where the context otherwise requires, "Prospectus," as used
herein, means the final prospectus (including the statement of additional
information incorporated therein by reference) as filed by the Fund with the
Commission (i) pursuant to Rule 497(h) under the Securities Act on or before the
second business day after the date hereof (or such earlier time as may be
required under the Securities Act) or (ii) pursuant to Rule 497(b) under the
Securities Act on or before the fifth business day after the date hereof (or
such earlier time as may be required under the Securities Act), or, if no such
filing is required, the final prospectus (including the final statement of
additional information) included in the Registration Statement at the Effective
Time, in each case in the form furnished by the Fund to you for use by the
Underwriters and by dealers in connection with the confirmation of sales in the
offering of the Shares.
"Pricing Prospectus" means the Preliminary Prospectus that is included
in the Registration Statement, or otherwise furnished by the Fund to you for use
by the Underwriters and by dealers in connection with the offering of the
Shares, immediately prior to the Applicable Time (as defined below) and any
amendment or supplement to such Preliminary Prospectus from the Applicable Time
through the Closing Time (as defined below).
"Pricing Information" means the information relating to (i) the number
of Shares issued and (ii) the offering price of the Shares included on the cover
page of the Prospectus dependent upon such information.
"Disclosure Package" means the Pricing Prospectus taken together with
the Pricing Information.
"Sales Materials" means those advertising materials, sales literature
or other promotional materials or documents, if any, constituting an
advertisement pursuant to Rule 482 under the Securities Act authorized or
prepared by the Fund or authorized or prepared on behalf of the Fund by the
Investment Adviser (as defined below) or any representative thereof for use in
connection with the public offering or sale of the Shares;
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provided, however, that Sales Materials do not include any slides, tapes or
other materials or documents that constitute a "written communication" (as
defined in Rule 405 under the Securities Act) used in connection with a "road
show" or a "bona fide electronic road show" (each as defined in Rule 433 under
the Securities Act) related to the offering of Shares contemplated hereby
(collectively, "Road Show Materials").
"Applicable Time" means the time as of which this Agreement was
entered into, which shall be [__]:00 pm (New York City time) on the date of this
Agreement (or such other time as is agreed to by the Fund and the Managing
Representative on behalf of the Underwriters).
Xxxxx Xxxxx Management, a Massachusetts business trust ("Xxxxx Xxxxx"
or the "Investment Adviser") will act as the Fund's investment adviser pursuant
to an Investment Advisory Agreement by and between the Fund and the Investment
Adviser, dated as of October 17, 2005 (the "Investment Advisory Agreement").
Investors Bank & Trust Company will act as the custodian (the "Custodian") of
the Fund's cash and portfolio assets pursuant to a Custodian Agreement, dated as
of October 17, 2005 (the "Custodian Agreement"). PFPC Inc. will act as the
Fund's transfer agent, registrar, and dividend disbursing agent (the "Transfer
Agent") pursuant to a Transfer Agency Services Agreement, dated as of October
17, 2005 (the "Transfer Agency Agreement"). Xxxxx Xxxxx will act as the
administrator of the Fund pursuant to an Administration Agreement, dated as of
October 17, 2005 (the "Administration Agreement"). In addition, the Fund has
adopted a dividend reinvestment plan (the "Dividend Reinvestment Plan") pursuant
to which holders of Common Shares of the Fund may have their dividends
automatically reinvested in additional Common Shares of the Fund if so elected.
In connection with the issuance of the Shares, the Fund has adopted
Amended By-Laws, as amended through the date hereof (the "Amended Bylaws").
Deutsche Bank Trust Company Americas will act as the Fund's auction agent with
respect to the Shares pursuant to an Auction Agency Agreement, dated as of
August [__], 2006 (the "Auction Agency Agreement"). The Fund has entered into a
Letter Agreement, dated as of August [__], 2006, with the Depository Trust
Company (the "DTC Agreement"). The Fund has adopted rating agency guidelines
(the "Rating Agency Guidelines) in connection with the issuance of the Shares.
As used in this Agreement, "business day" shall mean a day on which
the New York Stock Exchange (the "NYSE") is open for trading. The terms
"herein," "hereof," "hereto," "hereinafter" and similar terms, as used in this
Agreement, shall in each case refer to this Agreement as a whole and not to any
particular section, paragraph, sentence or other subdivision of this Agreement.
The term "or," as used herein, is not exclusive.
The Fund, the Investment Adviser and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Fund agrees to
sell to the respective Underwriters and each of the Underwriters, severally
and not jointly,
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agrees to purchase from the Fund the aggregate number of Shares set forth
opposite the name of such Underwriter in Schedule A attached hereto in each
case at a purchase price of $24,750.00 per Share. The Fund is advised that
the Underwriters intend (i) to make a public offering of their respective
portions of the Shares as soon after the Effective Time as is advisable and
(ii) initially to offer the Shares upon the terms set forth in the
Prospectus. The Underwriters may from time to time increase or decrease the
public offering price after the initial public offering to such extent as
they may determine.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Shares shall be
made by the Underwriters to the Fund by Federal Funds wire transfer,
against delivery of the Shares to you through the facilities of the
Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York City time on the third business day following the date of this
Underwriting Agreement (unless another date or time shall be agreed to by
the Fund and the Managing Representative on behalf of the Underwriters).
The time at which such payment and delivery are actually made is
hereinafter sometimes called the "Closing Time." Certificates for the
Shares, if any, shall be delivered to you in definitive form in such names
and in such denominations as you shall specify on the second business day
preceding the Closing Time. For the purpose of expediting the checking of
the certificates for the Shares by you, the Fund agrees to make such
certificates, if any, available to you for such purpose at least one full
business day preceding the Closing Time.
3. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE INVESTMENT ADVISER. Each
of the Fund and the Investment Adviser jointly and severally represents and
warrants to each Underwriter as of the date of this Agreement and as of the
Closing Time, as following:
(a) (i)(A) the Registration Statement has heretofore become effective
under the Securities Act or, with respect to any registration
statement to be filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Securities Act, will be filed with
the Commission and become effective under the Securities Act no later
than 10:00 P.M., New York City time, on the date of determination of
the public offering price for the Shares; (B) no stop order of the
Commission preventing or suspending the use of any Preliminary
Prospectus or Sales Materials or of the Prospectus or the
effectiveness of the Registration Statement has been issued, and no
proceedings for such purpose have been instituted or, to the Fund's
knowledge, are contemplated by the Commission; and (C) the Exchange
Act Registration Statement has become effective as provided in Section
12 of the Exchange Act;
(ii) (A)the Registration Statement complied at the Effective Time,
complies as of the date hereof and, as amended or supplemented, at the
Closing Time, and at all times during which a prospectus is required
by
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the Securities Act to be delivered in connection with any sale of
Shares, will comply, in all material respects, with the requirements
of the Securities Act and the Investment Company Act; (B) each
Preliminary Prospectus and the Prospectus complied, at the time it was
filed with the Commission, and the Prospectus complies as of the date
hereof and, as amended or supplemented, at the Closing Time, and at
all times during which a prospectus is required by the Securities Act
to be delivered in connection with any sale of Shares, will comply, in
all material respects with the requirements of the Securities Act
(including, without limitation, Section 10(a) of the Securities Act)
and the Investment Company Act; and (C) each of the Sales Materials
complied, at the time it was first used in connection with the public
offering of the Shares, and complies as of the date hereof, in all
material respects with the requirements of the Securities Act
(including, without limitation, Rule 482 thereunder), the Investment
Company Act and the applicable rules and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD");
(iii)(A) the Registration Statement as of the Effective Time did not,
the Registration Statement (including any post-effective amendment
thereto declared or deemed to be effective by the Commission) as of
the date hereof does not, and the Registration Statement (including
any post-effective amendment thereto declared or deemed to be
effective by the Commission) as of the Closing Time will not, in each
case, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; (B) at no time during the period
that begins as of the Applicable Time and ends at the Closing Time did
or will the Disclosure Package include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; (C) at no time during the period
that begins at the time each of the Sales Materials was first used in
connection with the public offering of the Shares and ends at the
Applicable Time did any of the Sales Materials include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (D) at
no time during the period that begins on the earlier of the date of
the Prospectus and the date the Prospectus is filed with the
Commission and ends at the latest of the Closing Time and the end of
the period during which a prospectus is required by the Securities Act
to be delivered in connection with any sale of Shares did or will the
Prospectus, as then amended or supplemented, include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Fund makes no representation or warranty with
respect to any statement contained in the Registration Statement, the
Disclosure Package or the Prospectus in reliance upon and
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in conformity with information concerning an Underwriter and furnished
in writing by or on behalf of such Underwriter through the Managing
Representative to the Fund expressly for use in the Registration
Statement, the Disclosure Package or the Prospectus as described in
Section 9(f) hereof.
(b) (i) The Fund has been duly formed, is validly existing as a business
trust under the laws of The Commonwealth of Massachusetts, with full
power and authority to conduct all the activities conducted by it, to
own or lease all assets owned or leased by it and to conduct its
business as described in the Registration Statement, the Pricing
Prospectus and the Prospectus; (ii) the Fund is duly licensed and
qualified to do business and in good standing in each jurisdiction in
which its ownership or leasing of property or its conducting of
business requires such qualification, except where the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Fund; (iii) the Fund owns, possesses or has obtained and
currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations, whether foreign or
domestic, necessary to carry on its business as contemplated in the
Pricing Prospectus and the Prospectus; and (iv) the Fund has no
subsidiaries.
(c) The capitalization of the Fund is as set forth in the Registration
Statement, the Pricing Prospectus and the Prospectus. The Common
Shares conform in all material respects to the description of them in
the Pricing Prospectus and the Prospectus. All the outstanding Common
Shares have been duly authorized and are validly issued, fully paid
and nonassessable (except as described in the Registration Statement).
The Shares to be issued and delivered to and paid for by the
Underwriters in accordance with this Underwriting Agreement against
payment therefor as provided by this Underwriting Agreement have been
duly authorized and when issued and delivered to the Underwriters will
have been validly issued and will be fully paid and nonassessable
(except as described in the Registration Statement). No person is
entitled to any preemptive or other similar rights with respect to the
Shares.
(d) The Fund is duly registered with the Commission under the Investment
Company Act as a diversified, closed-end management investment
company, and, subject to the filing of any final amendment to the
Registration Statement (a "Final Amendment"), if not already filed,
all action under the Securities Act and the Investment Company Act, as
the case may be, necessary to make the public offering and consummate
the sale of the Shares as provided in this Underwriting Agreement has
or will have been taken by the Fund.
(e) The Fund has full power and authority to enter into each of this
Underwriting Agreement, the Investment Advisory Agreement, the
Custodian Agreement, the Transfer Agency Agreement, the Auction
7
Agency Agreement, the DTC Agreement and the Dividend Reinvestment Plan
(collectively, the "Fund Agreements") and to perform all of the terms
and provisions hereof and thereof to be carried out by it and (i) each
Fund Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Fund, (ii) each Fund Agreement does
not violate in any material respect any of the applicable provisions
of the Investment Company Act or the Investment Advisers Act of 1940,
as amended, and the rules and regulations thereunder (collectively
called the "Advisers Act"), as the case may be, and (iii) assuming due
authorization, execution and delivery by the other parties thereto,
each Fund Agreement constitutes the legal, valid and binding
obligation of the Fund enforceable in accordance with its terms, (A)
subject, as to enforcement, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (B) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issue and sale by the Fund of the Shares as
contemplated by this Underwriting Agreement and (iii) the performance
by the Fund of its obligations under any of the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the
Fund Agreements conflicts with or will conflict with, or results or
will result in a breach of, the Declaration of Trust of the Fund, as
amended through the date hereof, or the Amended Bylaws (including the
Rating Agency Guidelines) or any agreement or instrument to which the
Fund is a party or by which the Fund is bound, or any law, rule or
regulation, or order of any court, governmental instrumentality,
securities exchange or association or arbitrator, whether foreign or
domestic, applicable to the Fund, other than state securities or "blue
sky" laws applicable in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to this Underwriting
Agreement.
(g) The Fund is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which it
or its property is bound or affected.
(h) No person has any right to the registration of any securities of the
Fund because of the filing of the registration statement.
(i) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required by the Fund for the
consummation by the Fund of the transactions to be performed by the
Fund or the performance by the Fund of all the terms and provisions to
be performed by or on behalf of it in each case as contemplated in the
Fund Agreements, except such as (i)
8
have been obtained under the Securities Act, the Investment Company
Act, or the Advisers Act, and (ii) may be required by the NYSE or
under state securities or "blue sky" laws, in connection with the
purchase and distribution of the Shares by the Underwriters pursuant
to this Underwriting Agreement.
(j) The Common Shares are listed on the NYSE.
(k) Deloitte & Touche LLP, whose report appears in the Prospectus, is an
independent registered public accounting firm with respect to the Fund
as required by the Securities Act and the Investment Company Act.
(l) The statement of assets and liabilities included or incorporated by
reference in the Registration Statement, the Pricing Prospectus and
the Prospectus presents fairly in all material respects, in accordance
with generally accepted accounting principles in the United States
applied on a consistent basis, the financial position of the Fund as
of the date indicated.
(m) The Fund will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets through an
asset reconciliation procedure or otherwise at reasonable intervals
and appropriate action is taken with respect to any differences.
(n) Since the date as of which information is given in the Registration
Statement, the Pricing Prospectus and the Prospectus, except as
otherwise stated therein, (i) there has been no material adverse
change in the condition, financial or otherwise, business prospects,
properties, net assets or results of operations of the Fund, whether
or not arising in the ordinary course of business, (ii) there have
been no transactions entered into by the Fund other than those in the
ordinary course of its business and (iii) there has been no dividend
or distribution of any kind declared, paid or made on any class of its
capital shares.
(o) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to
the knowledge of the Fund, threatened against or affecting the Fund,
which (i) might result in any material adverse change in the
condition, financial or otherwise, business affairs or business
prospects of the Fund or might materially adversely affect the
properties or assets of the Fund or (ii) is of a character required to
be described in the Registration Statement, the Pricing Prospectus or
the
9
Prospectus; and there are no contracts, franchises or other documents
that are of a character required to be described in, or that are
required to be filed as exhibits to, the Registration Statement that
have not been described or filed as required.
(p) The Shares have been, or prior to the Closing Time will be, assigned a
rating of "AA" by Fitch and "Aa" by Xxxxx'x.
(q) The Fund intends to direct the investment of the proceeds of the
offering of the Shares in such a manner as to comply with the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code").
(r) The Fund has not distributed and, prior to the later to occur of the
(i) Closing Time and (b) completion of the distribution of the Shares,
will not distribute any offering material in connection with the
public offering or sale of the Shares other than the Registration
Statement, the Disclosure Package, the Sales Materials and the
Prospectus.
(s) To the knowledge of the Fund after due inquiry, there are no Sales
Materials and no Road Show Materials authorized or prepared by the
Fund or authorized or prepared on behalf of the Fund by the Investment
Adviser or any representative thereof for use in connection with the
public offering or sale of the Shares contained or contains any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(t) Except as disclosed in the Registration Statement, the Pricing
Prospectus and the Prospectus (or any amendment or supplement to
either of them), to the Fund's knowledge, after due inquiry, no
trustee of the Fund is an "interested person" (as defined in the
Investment Company Act) of the Fund or an "affiliated person" (as
defined in the Investment Company Act) of any Underwriter listed in
Schedule I hereto.
In addition, any certificate signed by any officer of the Fund and
delivered to the Underwriters or counsel for the Underwriters in connection
with the offering of the Shares shall be deemed to be a representation and
warranty by the Fund as to matters covered thereby, to each Underwriter.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT ADVISER. The Investment
Adviser represents to each Underwriter as of the date of this Agreement and
as of the Closing Time as follows:
(a) The Investment Adviser has been duly formed, is validly existing as a
business trust under the laws of The Commonwealth of Massachusetts
with full power and authority to conduct all of the activities
conducted by it, to own or lease all of the assets owned or leased by
it and to conduct its
10
business as described in the Registration Statement, the Pricing
Prospectus and the Prospectus, and the Investment Adviser is duly
licensed and qualified to do business and in good standing in each
jurisdiction in which it is required to be so qualified, except to the
extent that failure to be so qualified or be in good standing would
not have a material adverse affect on the Investment Adviser's ability
to provide services to the Fund; and the Investment Adviser owns,
possesses or has obtained and currently maintains all governmental
licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Registration Statement, the Pricing
Prospectus and the Prospectus.
(b) The Investment Adviser is (i) duly registered as an investment adviser
under the Advisers Act and (ii) not prohibited by the Advisers Act or
the Investment Company Act from acting as the investment adviser for
the Fund as contemplated by the Investment Advisory Agreement, the
Registration Statement, the Pricing Prospectus and the Prospectus.
(c) The Investment Adviser has full power and authority to enter into each
of this Underwriting Agreement, the Investment Advisory Agreement, the
Administration Agreement, and the Shareholder Servicing Agreement
(collectively, the "Adviser Agreements") and to carry out all the
terms and provisions hereof and thereof to be carried out by it; and
each Adviser Agreement has been duly and validly authorized, executed
and delivered by the Investment Adviser; none of the Adviser
Agreements violate in any material respect any of the applicable
provisions of the Investment Company Act or the Advisers Act; and
assuming due authorization, execution and delivery by the other
parties thereto, each Adviser Agreement constitutes a legal, valid and
binding obligation of the Investment Adviser, enforceable in
accordance with its terms, (i) subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity
or at law) and (ii) except as rights to indemnity thereunder may be
limited by federal or state securities laws.
(d) Neither (i) the execution and delivery by the Investment Adviser of
any Adviser Agreement nor (ii) the consummation by the Investment
Adviser of the transactions contemplated by, or the performance of its
obligations under any Adviser Agreement conflicts or will conflict
with, or results or will result in a breach of, the Declaration of
Trust or By-Laws of the Investment Adviser or any agreement or
instrument to which the Investment Adviser is a party or by which the
Investment Adviser is bound, or any law, rule or regulation, or order
of any court, governmental instrumentality, securities exchange or
association or arbitrator, whether foreign or domestic, applicable to
the Investment Adviser.
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(e) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required for the consummation of the
transactions contemplated in, or the performance by the Investment
Adviser of its obligations under, any Adviser Agreement, as the case
may be, except such as (i) have been obtained under the Securities
Act, the Investment Company Act, or the Advisers Act, and (ii) may be
required by the NYSE or under state securities or "blue sky" laws, in
connection with the purchase and distribution of the Shares by the
Underwriters pursuant to this Underwriting Agreement.
(f) The description of the Investment Adviser and its business and the
statements attributable to the Investment Adviser in the Registration
Statement, the Pricing Prospectus and the Prospectus comply with the
requirements of the Securities Act and the Investment Company Act and
do not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein (in the case of the Pricing
Prospectus and the Prospectus in light of the circumstances in which
they were made) not misleading.
(g) Except as disclosed, there is no action, suit or proceeding before or
by any court, commission, regulatory body, administrative agency or
other governmental agency or body, foreign or domestic, now pending
or, to the knowledge of the Investment Adviser, threatened against or
affecting the Investment Adviser of a nature required to be disclosed
in the Registration Statement, the Pricing Prospectus or the
Prospectus or that might reasonably be expected to result in any
material adverse change in the condition, financial or otherwise,
business affairs or business prospects of the Investment Adviser or
the ability of the Investment Adviser to fulfill its obligations under
any Adviser Agreement.
(h) In the event that the Fund or the Investment Adviser has made
available any Road Show Materials or promotional materials (other than
the Sales Materials) by means of an Internet web site or similar
electronic means such as to constitute a bona fide electronic road
show, the Investment Adviser has installed and maintained
pre-qualification and password-protection or similar procedures
designed to effectively prohibit access to such Road Show Materials or
promotional materials by persons other than qualified broker-dealers
and registered representatives thereof.
In addition, any certificate signed by any officer of the Investment
Adviser and delivered to the Underwriters or counsel for the Underwriters
in connection with the offering of the Shares shall be deemed to be a
representation and warranty by the Investment Adviser, as to matters
covered thereby, to each Underwriter.
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5. AGREEMENTS OF THE PARTIES.
(a) If the registration statement relating to the Shares has not yet
become effective, the Fund will promptly file a Final Amendment, if
not previously filed, with the Commission, and will use its best
efforts to cause such registration statement to become effective and,
as soon as the Fund is advised, will advise the Managing
Representative when the Registration Statement or any amendment
thereto has become effective. If it is necessary for a post-effective
amendment to the Registration Statement, or a Registration Statement
under Rule 462(b) under the Securities Act, to be filed with the
Commission and become effective before the Shares may be sold, the
Fund will use its best efforts to cause such post-effective amendment
or such Registration Statement to be filed and become effective as
soon as possible, and the Fund will advise you promptly and, if
requested by you, will confirm such advice in writing, (i) when such
post-effective amendment or such Registration Statement has become
effective. If the Registration Statement has become effective and the
Prospectus contained therein omits certain information at the time of
effectiveness pursuant to Rule 430A under the Securities Act, the Fund
will file a 430A Prospectus pursuant to Rule 497(h) under the
Securities Act as promptly as practicable, but no later than the
second business day following the earlier of the date of the
determination of the offering price of the Shares or the date the
Prospectus is first used after the Effective Time. If the Registration
Statement has become effective and the Prospectus contained therein
does not so omit such information, the Fund will file a Prospectus
pursuant to Rule 497(b) or a certification pursuant to Rule 497(j)
under the Securities Act as promptly as practicable, but no later than
the fifth business day following the date of the later of the
Effective Time or the commencement of the public offering of the
Shares after the Effective Time. In either case, the Fund will provide
the Managing Representative satisfactory evidence of the filing. The
Fund will not file with the Commission any Prospectus or any other
amendment (except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which distribution of the
Shares is completed) or supplement to the Registration Statement or
the Prospectus unless a copy has first been submitted to the Managing
Representative a reasonable time before its filing and the Managing
Representative has not objected to it in writing within a reasonable
time after receiving the copy.
(b) For the period of three years from the date hereof, the Fund will
advise the Managing Representative promptly (i) of the issuance by the
Commission of any order in respect of the Fund or the Investment
Adviser which relates to the Fund, or which relates to any material
arrangements or proposed material arrangements involving the Fund or
the Investment Adviser, (ii) of the initiation or threatening of any
proceedings for, or receipt by the Fund of any notice with respect to,
any suspension of the
13
qualification of the Shares for sale in any jurisdiction or the
issuance of any order by the Commission suspending the effectiveness
of the Registration Statement, (iii) of receipt by the Fund, or any
representative or attorney of the Fund, of any other communication
from the Commission relating in any material way to the Fund, the
Registration Statement, the Notification, any Preliminary Prospectus,
the Sales Materials, the Prospectus or to the transactions
contemplated by this Underwriting Agreement and (iv) the issuance by
any court, regulatory body, administrative agency or other
governmental agency or body, whether foreign or domestic, of any
order, ruling or decree, or the threat to initiate any proceedings
with respect thereto, regarding the Fund, which relates in any
material way to the Fund or any material arrangements or proposed
material arrangements involving the Fund. The Fund will make every
reasonable effort to prevent the issuance of any order suspending the
effectiveness of the Registration Statement and, if any such order is
issued, to obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting Agreement, the
Fund will deliver to the Managing Representative, without charge, a
signed copy of the Registration Statement and the Notification and of
any amendments (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution
of the Shares is completed) to either the Registration Statement or
the Notification (including all exhibits filed with any such document)
and as many conformed copies of the Registration Statement and any
amendments thereto (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution
of the Shares is completed) (excluding exhibits) as the Managing
Representative may reasonably request.
(d) During such period as a prospectus is required by law to be delivered
by an underwriter or a dealer, the Fund will deliver, without charge,
to the Representatives, the Underwriters and any dealers, at such
office or offices as the Representatives may designate, as many copies
of the Prospectus as the Representatives may reasonably request, and,
if any event occurs during such period as a result of which it is
necessary to amend or supplement the Prospectus, in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading in any material respect, or if during such
period it is necessary to amend or supplement the Prospectus to comply
with the Securities Act or the Investment Company Act, the Fund
promptly will prepare, submit to the Managing Representative, file
with the Commission and deliver, without charge, to the Underwriters
and to dealers (whose names and addresses the Managing Representative
will furnish to the Fund) to whom Shares may have been sold by the
Underwriters, and to other dealers on request,
14
amendments or supplements to the Prospectus so that the statements in
such Prospectus, as so amended or supplemented, will not, in light of
the circumstances under which they were made, be misleading in any
material respect and will comply with the Securities Act and the
Investment Company Act. Delivery by the Underwriters of any such
amendments or supplements to the Prospectus will not constitute a
waiver of any of the conditions in Section 6 hereof.
(e) The Fund will make generally available to holders of the Fund's
securities, as soon as practicable but in no event later than the last
day of the 18th full calendar month following the calendar quarter in
which the date of the Effective Time falls, an earnings statement, if
applicable, satisfying the provisions of the last paragraph of Section
11(a) of the Securities Act and, at the option of the Fund, Rule 158
under the Securities Act.
(f) The Fund will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Fund's counsel and accountants in
connection with the registration of the Shares and all other expenses
in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus
and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or reproducing this Underwriting Agreement and any other
documents in connection with the offering, purchase, sale and delivery
of the Shares (including advertising expenses of the Underwriters, if
any); (iii) the cost of preparing share certificates; (iv) the
expenses (including, but not limited to, travel, hotels and other
accommodations) incurred by the Fund's or the Investment Adviser's
directors, officers, employees and other personnel in connection with
meetings held with registered brokers in connection with the offering
of the Shares, the preparing to market and the marketing of the
Shares; (v) any fees charged by securities rating services for rating
the Shares; (vi) the fees and expenses of the Depository Trust Company
and its nominee, the Custodian and the Auction Agent; and (vii) all
other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided
for. The Fund and the Investment Adviser may otherwise agree between
themselves as to the payment of the foregoing expenses, whether or not
the transactions contemplated by this Underwriting Agreement are
consummated, provided, however, that in no event shall the
Underwriters be obligated to pay any of the foregoing expenses. It is
understood, however, that, except as provided in this Section 5 and
Section 8 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel and stock transfer
taxes, if any, on resale of any of the Shares by them, except any
advertising expenses connected with any offers they may make.
15
(g) If the transactions contemplated by this Underwriting Agreement are
not consummated, except as otherwise provided herein, no party will be
under any liability to any other party, except that (i) if this
Underwriting Agreement is terminated by (x) the Fund or the Investment
Adviser pursuant to any of the provisions hereof or (y) by the
Representatives or the Underwriters because of any inability, failure
or refusal on the part of the Fund or the Investment Adviser to comply
with any material terms of this Underwriting Agreement or because any
of the conditions in Section 6 are not satisfied, the Investment
Adviser or the Investment Adviser's affilates and the Fund, jointly
and severally, will reimburse the Underwriters for all out-of-pocket
expenses (including the reasonable fees, disbursements and other
charges of their counsel) reasonably incurred by them in connection
with the proposed purchase and sale of the Shares and (ii) no
Underwriter who has failed or refused to purchase the Shares agreed to
be purchased by it under this Underwriting Agreement, in breach of its
obligations pursuant to this Underwriting Agreement, will be relieved
of liability to the Fund, the Investment Adviser and the other
Underwriters for damages occasioned by its default.
(h) Without the prior written consent of the Managing Representative, the
Fund will not offer, sell or register with the Commission, or announce
an offering of, any equity securities of the Fund, within 180 days
after the date of the Effective Time, except for the Shares as
described in the Prospectus and any issuances of Common Shares
pursuant to the Dividend Reinvestment Plan.
(i) The Fund will direct the investment of the net proceeds of the
offering of the Shares in such a manner as to comply with the
investment objective and policies of the Fund as described in the
Prospectus.
(j) No later than the Closing Time, the Underwriters will provide, and
will cause any selling group member to whom they have sold Shares to
provide, the Auction Agent with a list of the record names of the
persons to whom they have sold Shares, the number of Shares sold to
each such person, and the number of Shares they are holding as of the
Closing Time; provided that in lieu of thereof, an Underwriter may
provide the Auction Agent with a list indicating itself as the sole
holder of all the Shares sold by such Underwriter.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the Shares are subject to the accuracy on the date
of this Underwriting Agreement, and as of the Closing Time, of the
representations of the Fund and the Investment Adviser in this Underwriting
Agreement, to the accuracy and completeness of all material statements made
by the Fund or the Investment Adviser or any of their respective officers
in any certificate delivered to the Managing Representative or its counsel
pursuant to this Underwriting Agreement, to performance by the Fund and the
Investment Adviser of their
16
respective obligations under this Underwriting Agreement and to each of the
following additional conditions:
(a) The Registration Statement must have become effective by 5:30 p.m.,
New York City time, on the date of this Underwriting Agreement or such
later date and time as the Managing Representative consents to in
writing. The Prospectus must have been filed in accordance with Rule
497(b) or (h) or a certificate must have been filed in accordance with
Rule 497(j), as the case may be, under the Securities Act.
(b) No order suspending the effectiveness of the Registration Statement
may be in effect and no proceedings for such purpose may be pending
before or, to the knowledge of counsel to the Underwriters, threatened
by the Commission, and any requests for additional information on the
part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) must be complied with or waived to the
reasonable satisfaction of the Managing Representative.
(c) Since the dates as of which information is given in the Registration
Statement, the Pricing Prospectus and the Prospectus, as of the date
of this Underwriting Agreement (i) there must not have been any
material change in the Common Shares, the Shares or the liabilities of
the Fund except as set forth in or contemplated by the Pricing
Prospectus or the Prospectus; (ii) there must not have been any
material adverse change in the general affairs, prospects, management,
business, financial condition or results of operations of the Fund or
the Investment Adviser whether or not arising from transactions in the
ordinary course of business as set forth in or contemplated by the
Pricing Prospectus or the Prospectus which in the judgment of the
Managing Representative would materially adversely affect the market
for the Shares; (iii) the Fund must not have sustained any material
loss or interference with its business from any court or from
legislative or other governmental action, order or decree, whether
foreign or domestic, or from any other occurrence not described in the
Registration Statement, the Pricing Prospectus and the Prospectus; and
(iv) there must not have occurred any event that makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement, the Pricing Prospectus or the
Prospectus or that is not reflected in the Registration Statement, the
Pricing Prospectus or the Prospectus but should be reflected therein
in order to make the statements or information therein (in the case of
the Pricing Prospectus and the Prospectus, in light of the
circumstances in which they were made) not misleading in any material
respect; if, in the judgment of the Managing Representative, any such
development referred to in clause (i), (ii), (iii), or (iv) of this
paragraph (c) makes it impracticable or inadvisable to consummate the
sale and delivery of the Shares pursuant to this Underwriting
Agreement by the Underwriters, at the initial public offering price of
the Shares.
17
(d) The Managing Representative must have received as of the Closing Time
a certificate, dated as of the date thereof, of the President or a
Vice-President and the chief financial or accounting officer of each
of the Fund and the Investment Adviser certifying (in their capacity
as such officers and, with respect to clauses (ii), (iii) and (vi)
below, on behalf of the Fund and the Investment Adviser, as the case
may be) that (i) the signers have carefully examined the Registration
Statement, the Prospectus, the Pricing Prospectus and this
Underwriting Agreement, (ii) the representations of the Fund (with
respect to the certificates from such Fund officers) and the
representations of the Investment Adviser (with respect to the
certificates from such officers of the Investment Adviser) in this
Underwriting Agreement are accurate on and as of the date of the
certificate, (iii) there has not been any material adverse change in
the general affairs, prospects, management, business, financial
condition or results of operations of the Fund (with respect to the
certificates from such Fund officers) or the Investment Adviser (with
respect to the certificates from such officers of the Investment
Adviser), which change would materially and adversely affect the
ability of the Fund or the Investment Adviser, as the case may be, to
fulfill its obligations under this Underwriting Agreement or the
Investment Advisory Agreement (with respect to the certificates from
such officers of the Investment Adviser), whether or not arising from
transactions in the ordinary course of business, (iv) with respect to
the Fund only, to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the
Registration Statement, prohibiting the sale of any of the Shares or
otherwise having a material adverse effect on the Fund has been issued
and no proceedings for any such purpose are pending before or, to the
knowledge of such officers after reasonable investigation, threatened
by the Commission or any other regulatory body, whether foreign or
domestic, (v) no order having a material adverse effect on the ability
of the Investment Adviser to fulfill its obligations under this
Underwriting Agreement or the Investment Advisory Agreement, as the
case may be, has been issued and no proceedings for any such purpose
are pending before or, to the knowledge of the officers of the
Investment Adviser after reasonable investigation, threatened by the
Commission or any other regulatory body, whether foreign or domestic,
and (vi) each of the Fund (with respect to the certificates from such
Fund officers) and the Investment Adviser (with respect to the
certificates from such officers of the Investment Adviser) has
performed all of its respective agreements that this Underwriting
Agreement requires it to perform by such Closing Time (to the extent
not waived in writing by the Managing Representative).
(e) The Managing Representative must have received as of the Closing Time
the opinions dated as of the date thereof substantially in the form of
Schedules B and C to this Underwriting Agreement from the counsel
identified in each such Schedules.
18
(f) The Managing Representative must have received as of the Closing Time
from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP an opinion dated as of
the date thereof with respect to the Fund, the Shares, the
Registration Statement and the Prospectus, this Underwriting Agreement
and the form and sufficiency of all proceedings taken in connection
with the sale and delivery of the Shares. Such opinion and proceedings
shall fulfill the requirements of this Section 6(f) only if such
opinion and proceedings are satisfactory in all respects to the
Managing Representative. The Fund and the Investment Adviser must have
furnished to such counsel such documents as counsel may reasonably
request for the purpose of enabling them to render such opinion.
(g) The Managing Representative must have received on the date this
Underwriting Agreement is signed and delivered by you a signed letter,
dated such date, substantially in the form of Schedule D to this
Underwriting Agreement from the independent registered public
accounting firm designated in such Schedule. The Managing
Representative also must have received as of the Closing Time a signed
letter from such accountants, dated as of the date thereof, confirming
on the basis of a review in accordance with the procedures set forth
in their earlier letter that nothing has come to their attention
during the period from a date not more than five business days before
the date of this Underwriting Agreement, specified in the letter, to a
date not more than five business days before the date of the Closing
Time, that would require any change in their letter referred to in the
foregoing sentence.
(h) The Shares shall have been accorded a rating of "AA" by Fitch and "Aa"
by Xxxxx'x, and a letter to such effect, dated as of or before the
Closing Time, shall have been delivered to the Managing
Representative.
(i) As of the Closing Time, and assuming the receipt of the net proceeds
from the sale of the Shares, the 1940 Act APS Asset Coverage and the
APS Basic Maintenance Amount (each as defined in the Prospectus) each
will be met.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement will comply only if they are in
form and scope reasonably satisfactory to counsel for the Underwriters,
provided that any such documents, forms of which are annexed hereto, shall
be deemed satisfactory to such counsel if substantially in such form.
7. TERMINATION. This Underwriting Agreement may be terminated by the Managing
Representative by notifying the Fund at any time:
(a) before the later of the Effective Time and the time when any of the
Shares are first generally offered pursuant to this Underwriting
Agreement by the Managing Representative to dealers by letter or
telegram;
19
(b) as of or before the Closing Time if, in the sole judgment of the
Managing Representative, payment for and delivery of the Shares is
rendered impracticable or inadvisable because (i) trading in the
equity securities of the Fund is suspended by the Commission or by the
principal exchange that lists the Common Shares, (ii) trading in
securities generally on the NYSE or the Nasdaq Stock Market shall have
been suspended or limited or minimum or maximum prices shall have been
generally established on such exchange or over-the-counter market,
(iii) additional material governmental restrictions, not in force on
the date of this Underwriting Agreement, have been imposed upon
trading in securities or trading has been suspended on any U.S.
securities exchange, (iv) a general banking moratorium has been
established by U.S. federal or New York authorities or (v) any
material adverse change in the financial or securities markets in the
United States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or
other calamity, terrorist activity or crisis shall have occurred the
effect of any of which is such as to make it, in the sole judgment of
the Managing Representative, impracticable or inadvisable to market
the Shares on the terms and in the manner contemplated by the
Prospectus; or
(c) as of or before the Closing Time, if any of the conditions specified
in Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase as of the Closing Time the Shares
agreed to be purchased as of the Closing Time by such Underwriter or
Underwriters, the Managing Representative may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Managing Representative deems advisable, or one or more of the remaining
Underwriters may agree to purchase such Shares in such proportions as may
be approved by the Managing Representative, in each case upon the terms set
forth in this Underwriting Agreement. If no such arrangements have been
made within 36 hours after the date of the Closing Time, and
(a) the number of Shares to be purchased by the defaulting Underwriters as
of the Closing Time does not exceed 10% of the Shares that the
Underwriters are obligated to purchase as of the Closing Time, each of
the nondefaulting Underwriters will be obligated to purchase such
Shares on the terms set forth in this Underwriting Agreement in
proportion to their respective obligations under this Underwriting
Agreement, or
(b) the number of Shares to be purchased by the defaulting Underwriters as
of the Closing Time exceeds 10% of the Shares to be purchased by all
the Underwriters as of the Closing Time, the Fund will be entitled to
an
20
additional period of 24 hours within which to find one or more
substitute underwriters reasonably satisfactory to the Managing
Representative to purchase such Shares on the terms set forth in this
Underwriting Agreement.
Upon the occurrence of the circumstances described in the foregoing
paragraph (b), either the Managing Representative or the Fund will have the
right to postpone the date of the Closing Time for not more than five
business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement, the
Pricing Prospectus or the Prospectus) may be effected by the Managing
Representative and the Fund. If the number of Shares to be purchased as of
the Closing Time by such defaulting Underwriter or Underwriters exceeds 10%
of the Shares that the Underwriters are obligated to purchase as of the
Closing Time, and none of the nondefaulting Underwriters or the Fund makes
arrangements pursuant to this Section within the period stated for the
purchase of the Shares that the defaulting Underwriters agreed to purchase,
this Underwriting Agreement will terminate without liability on the part of
any nondefaulting Underwriter, the Fund, or the Investment Adviser, except
as provided in Sections 5(g) and 9 hereof. Any action taken under this
Section will not affect the liability of any defaulting Underwriter to the
Fund or the Investment Adviser or to any nondefaulting Underwriters arising
out of such default. A substitute underwriter will become an Underwriter
for all purposes of this Underwriting Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) Each of the Fund and the Investment Adviser, jointly and severally,
agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and their successors and assigns of
all of the foregoing persons from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Securities Act, the Exchange Act,
the Investment Company Act, the Advisers Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim
(i) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Fund) or arises out of or is
based upon any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (ii) arises out of or is based any untrue
statement or alleged untrue statement of a material fact included in
any Preliminary Prospectus, any Road Show Material, the Disclosure
Package, any Sales Material or the Prospectus (as it may be amended or
supplemented) or arises out of or is based upon any omission or
alleged omission to state a material fact
21
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except with
respect to either of the foregoing clause (i) and (ii) insofar as any
such loss, damage, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information
furnished in writing by or on behalf of such Underwriter through the
Managing Representative to the Fund expressly for use with reference
to any Underwriter in such Registration Statement or in such
Prospectus (as amended or supplemented) or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information (with respect to such Prospectus, in light of the
circumstances under which they were made) not misleading.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Fund or the Investment Adviser
pursuant to the foregoing paragraph, such Underwriter or such person
shall promptly notify the Fund or the Investment Adviser, as the case
may be, in writing of the institution of such Proceeding and the Fund
or the Investment Adviser shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Fund or the Investment
Adviser shall not relieve the Fund or the Investment Adviser from any
liability which the Fund or the Investment Adviser may have to any
Underwriter or any such person or otherwise. Such Underwriter or such
person shall have the right to employ its or their own counsel in any
such case, but the reasonable fees and expenses of such counsel shall
be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by
the Fund or the Investment Adviser, as the case may be, in connection
with the defense of such Proceeding or the Fund or the Investment
Adviser shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or
them, which are different from, additional to or in conflict with
those available to the Fund or the Investment Adviser (in which case
the Fund or the Investment Adviser shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such reasonable fees and expenses
shall be borne by the Fund or the Investment Adviser and paid as
incurred (it being understood, however, that the Fund or the
Investment Adviser shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
22
representing the indemnified parties who are parties to such
Proceeding). Neither the Fund nor the Investment Adviser shall be
liable for any settlement of any Proceeding effected without its
written consent but if settled with the written consent of the Fund or
the Investment Adviser, the Fund or the Investment Adviser, as the
case may be, agrees to indemnify and hold harmless any Underwriter and
any such person from and against any loss or liability by reason of
such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for reasonable fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then
the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party
at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that
are the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf
of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund and the Investment Adviser, and each of their
respective shareholders, partners, managers, members, trustees,
directors and officers, and any person who controls the Fund or the
Investment Adviser within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation), which, jointly or severally, the Fund or the
Investment Adviser or any such person may incur under the Securities
Act, the Exchange Act, the Investment Company Act, the Advisers Act,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf of
such Underwriter to the Fund or the Investment Adviser expressly for
use with reference to such Underwriter in the Registration Statement
(or in the Registration Statement as amended by any post-effective
amendment thereof by the Fund) or in the Prospectus, or arises out of
or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated in
23
such Registration Statement or the Prospectus or necessary to make
such information not misleading (with respect to the Prospectus, in
light of the circumstances under which they were made).
If any Proceeding is brought against the Fund, the Investment
Adviser or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Fund,
the Investment Adviser or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that
the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the
Fund, the Investment Adviser or any such person or otherwise. The
Fund, the Investment Adviser or such person shall have the right to
employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Fund, the Investment
Adviser or such person, as the case may be, unless the employment of
such counsel shall have been authorized in writing by such Underwriter
in connection with the defense of such Proceeding or such Underwriter
shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them, which
are different from or additional to or in conflict with those
available to such Underwriter (in which case such Underwriter shall
not have the right to direct the defense of such Proceeding on behalf
of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter),
in any of which events such fees and expenses shall be borne by such
Underwriter and paid as incurred (it being understood, however, that
such Underwriter shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any
such Proceeding effected without the written consent of such
Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless
the Fund, the Investment Adviser and any such person from and against
any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60
business days after receipt by
24
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party
at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that
are the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf
of such indemnified party.
(c) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under subsections (a) and (b) of this Section
9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and
the Investment Adviser on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Fund and the Investment Adviser on the one hand and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the
Investment Adviser on the one hand and the Underwriters on the other
shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Fund and
the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the
Shares. The relative fault of the Fund and the Investment Adviser on
the one hand and of the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Fund or the Investment
Adviser or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims
referred to in this subsection shall be deemed to include any legal or
other fees or expenses reasonably
25
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Fund, the Investment Adviser and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the fees and commissions received
by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to
their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Fund
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf
of the Fund or the Investment Adviser, its shareholders, partners,
advisers, members, trustees, directors or officers or any person who
controls the Fund or the Investment Adviser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Agreement or the issuance
and delivery of the Shares. The Fund, the Investment Adviser and each
Underwriter agree promptly to notify each other of the commencement of
any Proceeding against it and, in the case of the Fund or the
Investment Adviser, against any of the Fund's or the Investment
Adviser's shareholders, partners, managers, members, trustees,
directors or officers in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement or
Prospectus.
(f) The Fund and the Investment Adviser each acknowledge that the
statements in the Prospectus with respect to (1) the public offering
of the Shares as set forth on the cover page of and (2) selling
concessions and reallowances of selling concessions under the caption
"Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter through the
Managing Representative to the Fund expressly for use with reference
to such Underwriter in the Registration Statement or in the Prospectus
(as amended or supplemented). The Underwriters severally confirm that
these statements
26
are correct in all material respects and were so furnished by or on
behalf of the Underwriters severally for use in the Prospectus.
(g) Notwithstanding any other provisions in this Section 9, no party shall
be entitled to indemnification or contribution under this Underwriting
Agreement against any loss, claim, liability, expense or damage
arising by reason of such person's willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties in the
performance of its duties hereunder. The parties hereto acknowledge
that the foregoing provision shall be applicable solely as to matters
arising under Section 17(i) of the Investment Company Act, and shall
not be construed to impose any duties or obligations upon any such
parties under this Agreement other than as specifically set forth
herein (it being understood that the Underwriters have no duty
hereunder to the Fund to perform any due diligence investigation).
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Fund or the Investment Adviser, shall
be sufficient in all respects if delivered or sent to the Fund or the
Investment Adviser, as the case may be, at the offices of the Fund or the
Investment Adviser at Xxxxx Xxxxx Management, 000 Xxxxx Xxxxxx, Xxxxxx, XX
00000.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and
the Fund and UBS Securities each consent to the jurisdiction of such courts
and personal service with respect thereto. The Fund and UBS Securities
hereby consent to personal jurisdiction, service and venue in any court in
which any Claim arising out of or in any way relating to this Agreement is
brought by any third party against UBS Securities or any indemnified party.
Each of UBS Securities, the Fund (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates)
and the Investment Adviser (on its behalf and, to the extent permitted by
applicable law, on behalf of its unitholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or
relating to this
27
Agreement. Each of the Fund and the Investment Adviser agrees that a final
judgment in any such action, proceeding or counterclaim brought in any such
court shall be conclusive and binding upon the Fund and the Investment
Adviser, as the case may be, and may be enforced in any other courts in the
jurisdiction of which the Fund or the Investment Adviser, as the case may
be, is or may be subject, by suit upon such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Fund and the Investment
Adviser and to the extent provided in Section 9 hereof the controlling
persons, shareholders, partners, members, trustees, managers, directors and
officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators.
No other person, partnership, association or corporation (including a
purchaser, as such purchaser, from any of the Underwriters) shall acquire
or have any right under or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, the Fund and the Investment Adviser, any successor or assign
of any substantial portion of the Fund's, the Investment Adviser's, or any
of the Underwriters' respective businesses and/or assets.
16. DISCLAIMER OF LIABILITY OF TRUSTEES AND BENEFICIARIES. A copy of the
Agreement and Declaration of Trust of each of the Fund and Xxxxx Xxxxx is
on file with the Secretary of State of The Commonwealth of Massachusetts,
and notice hereby is given that this Underwriting Agreement is executed on
behalf of the Fund and Xxxxx Xxxxx, respectively, by an officer or Trustee
of the Fund or Xxxxx Xxxxx, as the case may be, in his or her capacity as
an officer or Trustee of the Fund or Xxxxx Xxxxx, as the case may be, and
not individually and that the obligations under or arising out of this
Underwriting Agreement are not binding upon any of the Trustees, officers
or shareholders individually but are binding only upon the assets and
properties of the Fund or Xxxxx Xxxxx, as the case may be.
28
If the foregoing correctly sets forth the understanding among the
Fund, the Investment Adviser and the Underwriters, please so indicate in the
space provided below, whereupon this letter and your acceptance shall constitute
a binding agreement among the Fund, the Investment Adviser and the Underwriters,
severally.
Very truly yours,
XXXXX XXXXX CREDIT OPPORTUNITIES FUND
By:
------------------------------------
Title:
---------------------------------
XXXXX XXXXX MANAGEMENT
By:
------------------------------------
Title:
---------------------------------
29
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
UBS SECURITIES LLC
[ ]
By: UBS SECURITIES LLC
By:
---------------------------------
Title:
------------------------------
By:
---------------------------------
Title:
------------------------------
30
SCHEDULE A
NAME SHARES
---- ------
UBS Securities LLC
[ ]
TOTAL
A-1
SCHEDULE B
FORM OF OPINION OF
XXXXXXXXXXX & XXXXXXXX LLP REGARDING THE FUND
1. The Registration Statement and all post-effective amendments, if
any, are effective under the Securities Act and no stop order with respect
thereto has been issued and no proceeding for that purpose has been instituted
or, to the best of our knowledge, is threatened by the Commission. Any filing of
the Prospectus or any supplements thereto required under Rule 497 of the
Securities Act Rules prior to the date hereof have been made in the manner and
within the time required by such rule.
2. The Fund has been duly formed and is validly existing as a
Massachusetts business trust under the laws of The Commonwealth of
Massachusetts, with full power and authority to conduct all the activities
conducted by it, to own or lease all assets owned (or to be owned) or leased (or
to be leased) by it and to conduct its business as described in the Registration
Statement, the Pricing Prospectus and Prospectus, and the Fund is duly licensed
and qualified to do business and in good standing in each jurisdiction in which
its ownership or leasing of property or its conducting of business requires such
qualification, and the Fund owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders, approvals and
other authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Pricing Prospectus and the Prospectus. The Fund
has no subsidiaries.
3. The capitalization of the Fund is as set forth in the Registration
Statement, the Pricing Prospectus and the Prospectus. The Shares of Beneficial
Interest of the Fund conform in all respects to the description of them in the
Pricing Prospectus and the Prospectus. All the outstanding Shares of Beneficial
Interest have been duly authorized and are validly issued, fully paid and
nonassessable. The Shares to be issued and delivered to and paid for by the
Underwriters in accordance with the Underwriting Agreement against payment
therefor as provided by the Underwriting Agreement have been duly authorized and
when issued and delivered to the Underwriters will have been validly issued and
will be fully paid and nonassessable (except as described in the Registration
Statement). No person is entitled to any preemptive or other similar rights with
respect to the Shares.
4. The Fund is duly registered with the Commission under the
Investment Company Act as a diversified, closed-end management investment
company and all action under the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules, as the case may be,
necessary to make the public offering and consummate the sale of the Shares as
provided in the Underwriting Agreement has or will have been taken by the Fund.
B-1
5. The Fund has full power and authority to enter into each of the
Underwriting Agreement, the Investment Advisory Agreement, the Custodian
Agreement, the Transfer Agency Agreement, the Auction Agency Agreement and the
DTC Agreement (collectively, the "Fund Agreements") and to perform all of the
terms and provisions thereof to be carried out by it and (A) each Fund Agreement
has been duly and validly authorized, executed and delivered by the Fund, (B)
each Fund Agreement complies in all material respects with all applicable
provisions of the Investment Company Act, the Advisers Act, the Investment
Company Act Rules and the Advisers Act Rules, as the case may be, and (C)
assuming due authorization, execution and delivery by the other parties thereto,
each Fund Agreement constitutes the legal, valid and binding obligation of the
Fund enforceable in accordance with its terms, (1) subject, as to enforcement,
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (2) as rights to
indemnity thereunder may be limited by federal or state securities laws.
6. None of (A) the execution and delivery by the Fund of the Fund
Agreements, (B) the issue and sale by the Fund of the Shares as contemplated by
the Underwriting Agreement and (C) the performance by the Fund of its
obligations under the Fund Agreements or consummation by the Fund of the other
transactions contemplated by the Fund Agreements conflicts with or will conflict
with, or results or will result in a breach of, the Declaration of Trust or the
Amended Bylaws (including the Rating Agency Guidelines) of the Fund or any
agreement or instrument to which the Fund is a party or by which the Fund is
bound, or any law, rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, applicable to the Fund, except that we express no opinion
as to the securities or "blue sky" laws applicable in connection with the
purchase and distribution of the Shares by the Underwriters pursuant to the
Underwriting Agreement.
7. The Fund is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which it or its
property is bound or affected.
8. No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required by the Fund for the consummation by the Fund of
the transactions to be performed by the Fund or the performance by the Fund of
all the terms and provisions to be performed by or on behalf of it in each case
as contemplated in the Fund Agreements, except such as (A) have been obtained
under the Securities Act, the Investment Company Act, the Advisers Act, the
Securities Act Rules, the Investment Company Act Rules and the Advisers Act
Rules and (B) may be required by the New York Stock Exchange or under state
securities or "blue sky" laws in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to the Underwriting Agreement.
9. The Common Shares are listed on the New York Stock Exchange.
B-2
10. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to our knowledge, threatened
against or affecting the Fund, which is required to be disclosed in the Pricing
Prospectus and the Prospectus that is not disclosed in the Pricing Prospectus
and the Prospectus, and there are no contracts, franchises or other documents
that are of a character required to be described in, or that are required to be
filed as exhibits to, the Registration Statement that have not been described or
filed as required.
11. The Fund does not require any tax or other rulings to enable it to
qualify as a regulated investment company under Subchapter M of the Code.
12. Each of the sections in the Prospectus entitled "Federal Income
Tax Matters" and the section in the Statement of Additional Information entitled
"Taxes" is a fair summary of the principal United States federal income tax
rules currently in effect applicable to the Fund and to the purchase, ownership
and disposition of the Shares.
13. The Registration Statement (except the financial statements and
schedules and other financial data included therein as to which we express no
view), at the time it became effective, and the Prospectus (except as
aforesaid), as of the date thereof, complied as to form in all material respects
to the requirements of the Securities Act, the Investment Company Act and the
rules and regulations of the Commission thereunder.
In rendering our opinion, we have relied, as to factual matters, upon
the attached written certificates and statements of officers of the Fund.
In connection with the registration of the Shares, we have advised the
Fund as to the requirements of the Securities Act, the Investment Company Act
and the applicable rules and regulations of the Commission thereunder and have
rendered other legal advice and assistance to the Fund in the course of its
preparation of the Registration Statement, the Disclosure Package and the
Prospectus. Rendering such assistance involved, among other things, discussions
and inquiries concerning various legal and related subjects and reviews of
certain corporate records, documents and proceedings. We also participated in
conferences with representatives of the Fund and its accountants at which the
contents of the Registration Statement, the Disclosure Package and the
Prospectus and related matters were discussed. With your permission, we have not
undertaken, except as otherwise indicated herein, to determine independently,
and do not assume any responsibility for, the accuracy, completeness or fairness
of the statements in the Registration Statement, the Disclosure Package or the
Prospectus. On the basis of the information which was developed in the course of
the performance of the services referred to above, no information has come to
our attention that would lead us to believe that the Registration Statement, at
the time it became effective, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus, as of
B-3
its date and as of the date hereof, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading or that any amendment or supplement to the
Prospectus, as of its respective date, and as of the date hereof, contained any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements in the Prospectus (as so amended or
supplemented), in the light of the circumstances under which they were made, not
misleading (except the financial statements, schedules and other financial data
included therein, as to which we express no view), or that the Disclosure
Package, as of the Applicable Time, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except the financial statements, schedules and other
financial data included therein, as to which we express no view)
B-4
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING XXXXX XXXXX MANAGEMENT
1. Xxxxx Xxxxx has been duly formed and is validly existing as a
Massachusetts business trust under the laws of its jurisdiction of incorporation
with full power and authority to conduct all of the activities conducted by it,
to own or lease all of the assets owned or leased by it and to conduct its
business as described in the Registration Statement, the Pricing Prospectus and
Prospectus, and Xxxxx Xxxxx is duly licensed and qualified and in good standing
in each other jurisdiction in which it is required to be so qualified and Xxxxx
Xxxxx owns, possesses or has obtained and currently maintains all governmental
licenses, permits, consents, orders, approvals and other authorizations, whether
foreign or domestic, necessary for Xxxxx Xxxxx to carry on its business as
contemplated in the Registration Statement, the Pricing Prospectus and the
Prospectus.
2. Xxxxx Xxxxx is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the Investment Company
Act, the Advisers Act Rules or the Investment Company Act Rules from acting as
investment adviser for the Fund as contemplated by the Investment Advisory
Agreement, the Registration Statement, the Pricing Prospectus and the
Prospectus.
3. Xxxxx Xxxxx has full power and authority to enter into each of the
Underwriting Agreement, the Investment Advisory Agreement, the Administration
Agreement and the Shareholder Servicing Agreement (collectively, the "Xxxxx
Xxxxx Agreements") and to carry out all the terms and provisions thereof to be
carried out by it, and each such agreement has been duly and validly authorized,
executed and delivered by Xxxxx Xxxxx; each Xxxxx Xxxxx Agreement complies in
all material respects with all provisions of the Investment Company Act, the
Advisers Act, the Investment Company Act Rules and the Advisers Act Rules; and
assuming due authorization, execution and delivery by the other parties thereto,
each Xxxxx Xxxxx Agreement constitutes a legal, valid and binding obligation of
Xxxxx Xxxxx, enforceable in accordance with its terms, (1) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law) and (2) as
rights to indemnity thereunder may be limited by federal or state securities
laws.
4. Neither (A) the execution and delivery by Xxxxx Xxxxx of any Xxxxx
Xxxxx Agreement nor (B) the consummation by Xxxxx Xxxxx of the transactions
contemplated by, or the performance of its obligations under any Xxxxx Xxxxx
Agreement conflicts or will conflict with, or results or will result in a breach
of, the Agreement and Declaration of Trust or By-Laws of Xxxxx Xxxxx or any
agreement or instrument to which Xxxxx Xxxxx is a party or by which Xxxxx Xxxxx
is bound, or any law, rule or regulation, or order of any court, governmental
instrumentality, securities
C-1
exchange or association or arbitrator, whether foreign or domestic, applicable
to Xxxxx Xxxxx.
5. No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required for the consummation of the transactions
contemplated in, or the performance by Xxxxx Xxxxx of its obligations under, any
Xxxxx Xxxxx Agreement, except such as have been obtained under the Investment
Company Act, the Advisers Act, the Securities Act, the Investment Company Act
Rules, the Advisers Act Rules and the Securities Act Rules.
6. The description of Xxxxx Xxxxx and its business, and the statements
attributable to Xxxxx Xxxxx, in the Registration Statement, the Pricing
Prospectus and the Prospectus complies with the requirements of the Securities
Act, the Investment Company Act, the Securities Act Rules and the Investment
Company Act Rules and do not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to our knowledge, threatened
against or affecting Xxxxx Xxxxx of a nature required to be disclosed in the
Registration Statement, the Pricing Prospectus or Prospectus or that might
reasonably result in any material adverse change in the condition, financial or
otherwise, business affairs or business prospects of Xxxxx Xxxxx or the ability
of Xxxxx Xxxxx to fulfill its respective obligations under any Xxxxx Xxxxx
Agreement.
8. The Registration Statement (except the financial statements and
schedules and other financial data included therein as to which we express no
view), at the time it became effective, and the Prospectus (except as
aforesaid), as of the date thereof, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act,
the Investment Company Act and the rules and regulations of the Commission
thereunder.
In rendering our opinion, we have relied, as to factual matters, upon
the attached written certificates and statements of officers of Xxxxx Xxxxx.
In connection with the registration of the Shares, we have advised
Xxxxx Xxxxx as to the requirements of the Securities Act, the Investment Company
Act and the applicable rules and regulations of the Commission thereunder and
have rendered other legal advice and assistance to Xxxxx Xxxxx in the course of
the preparation of the Registration Statement, the Disclosure Package and the
Prospectus. Rendering such assistance involved, among other things, discussions
and inquiries concerning various legal and related subjects and reviews of
certain corporate records, documents and proceedings. We also participated in
conferences with representatives of the Fund and its
C-2
accountants and Xxxxx Xxxxx at which the contents of the Registration Statement,
the Disclosure Package and the Prospectus and related matters were discussed.
With your permission, we have not undertaken, except as otherwise indicated
herein, to determine independently, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements in the Registration
Statement, the Disclosure Package or the Prospectus. On the basis of the
information which was developed in the course of the performance of the services
referred to above, no information has come to our attention that would lead us
to believe that the Registration Statement, at the time it became effective,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date and as of the date
hereof, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or that any amendment or supplement to the Prospectus, as of its
respective date, and as of the date hereof, contained any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements in the Prospectus, in the light of the circumstances under
which they were made, not misleading (except the financial statements, schedules
and other financial data included therein, as to which we express no view), or
that the Disclosure Package, as of the Applicable Time, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (except the financial statements, schedules
and other financial data included therein, as to which we express no view).
C-3
SCHEDULE D
FORM OF ACCOUNTANT'S LETTER
____________, 2006
The Board of Trustees of
Xxxxx Xxxxx Credit Opportunities Fund
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of Xxxxx Xxxxx Credit
Opportunities Fund (the "Fund") as of [_____], 2006 included in the Registration
Statement on Form N-2 filed by the Fund under the Securities Act of 1933 (the
"Securities Act") (File No. 333-[________]) and under the Investment Company Act
of 1940 (the "Investment Company Act") (File No. 811-[_______]); such statement
and our report with respect to such statement are included in the Registration
Statement. In connection with the Registration Statement:
1. We are independent public accountants with respect to the Fund
within the meaning of the Securities Act and the applicable rules and
regulations thereunder.
2. In our opinion, the statement of assets and liabilities included in
the Registration Statement and audited by us complies as to form in all respects
with the applicable accounting requirements of the Securities Act, the
Investment Company Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Trustees and all Committees of the
Board of Trustees of the Fund as set forth in the minute books at the offices of
the Fund, officials of the Fund having advised us that the minutes of all such
meetings through [_______], 2006, were set forth therein.
4. Fund officials have advised us that no financial statements as of
any date subsequent to [_______], 2006, are available. We have made inquiries of
certain officials of the Fund who have responsibility for financial and
accounting matters regarding whether there was any change at [_______], 2006, in
the capital shares or net assets of the Fund as compared with amounts shown in
the [_______], 2006, statement of
D-1
assets and liabilities included in the Registration Statement, except for
changes that the Registration Statement discloses have occurred or may occur. On
the basis of our inquiries and our reading of the minutes as described in
Paragraph 3, nothing came to our attention that caused us to believe that there
were any such changes.
The foregoing procedures do not constitute an audit made in accordance
with generally accepted auditing standards. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures for your
purposes.
This letter is solely for the information of the addressees and to
assist the underwriters in conducting and documenting their investigation of the
affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Very truly yours,
DELOITTE & TOUCHE LLP
D-2
