EXHIBIT EX-99.CODE ETH
CODE OF ETHICS
FOR
CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER
OF
SPECIAL VALUE OPPORTUNITIES FUND, LLC
AND
SPECIAL VALUE EXPANSION FUND, LLC
AS ADOPTED BY THE BOARDS OF DIRECTORS
JUNE 18, 2004 AND AUGUST 19, 2004, RESPECTIVELY
Special Value Opportunities Fund, LLC ("SVOF") and Special Value Expansion
Fund, LLC ("SVEF") (each a "Fund", and together with SVOF, the "Funds") are
committed to conducting business in accordance with applicable laws, rules and
regulations and the highest standards of business ethics, and to full and
accurate disclosure -- financial and otherwise -- in compliance with applicable
law. This Code of Ethics, applicable to each Fund's Chief Executive Officer and
Chief Financial Officer (or persons performing similar functions) (together,
"Senior Officers"), sets forth policies to guide you in the performance of your
duties.
As a Senior Officer, you must comply with applicable law. You also have a
responsibility to conduct yourself in an honest and ethical manner. You have
leadership responsibilities that include creating a culture of high ethical
standards and a commitment to compliance, maintaining a work environment that
encourages the internal reporting of compliance concerns and promptly addressing
compliance concerns.
This Code of Ethics recognizes that the Senior Officers are subject to
certain conflicts of interest inherent in the operation of investment companies,
because the Senior Officers currently or may in the future serve as Senior
Officers of the Fund, as officers or employees of the Fund's investment manager
or co-manager (together with their respective advisory affiliates, the
"Adviser") and as officers or directors of other registered investment companies
and unregistered investment funds advised by the Adviser. This Code of Ethics
also recognizes that certain laws and regulations applicable to, and certain
policies and procedures adopted by, the Fund or the Adviser govern your conduct
in connection with many of the conflict of interest situations that arise in
connection with the operations of the Fund, including:
o the Investment Company Act of 1940, and the rules and regulation
promulgated thereunder by the Securities and Exchange Commission
(the "1940 Act");
o the Investment Advisers Act of 1940, and the rules and regulations
promulgated thereunder by the Securities and Exchange Commission
(the "Advisers Act");
o the Code of Ethics adopted by the Fund pursuant to Rule 17j-1(c)
under the 1940 Act (collectively, the "Fund's 1940 Act Code of
Ethics");
o one or more codes of ethics adopted by the Adviser that have been
reviewed and approved by those directors (the "Directors") of the
Fund that are not "interested persons" of the Fund (the "Independent
Directors") within the meaning of the 1940 Act (the "Adviser's 1940
Act Code of Ethics" and, together with the Fund's 1940 Act Code of
Ethics, the "1940 Act Codes of Ethics");
o the policies and procedures adopted by the Fund to address conflict
of interest situations, such as procedures under Rule 10f-3 and Rule
17a-7 under the 1940 Act (collectively, the "Fund Policies"); and
o the Adviser's general policies and procedures to address, among
other things, conflict of interest situations and related matters
(collectively, the "Adviser Policies").
The provisions of the 1940 Act, the Advisers Act, the 1940 Act Codes of Ethics,
the Fund Policies and the Adviser Policies are referred to herein collectively
as the "Additional Conflict Rules."
This Code of Ethics is different from, and is intended to supplement, the
Additional Conflict Rules. Accordingly, a violation of the Additional Conflict
Rules by a Senior Officer is hereby deemed not to be a violation of this Code of
Ethics, unless and until the Board of Directors of the Fund (the "Board") shall
determine that any such violation of the Additional Conflict Rules is also a
violation of this Code of Ethics.
SENIOR OFFICERS SHOULD ACT HONESTLY AND CANDIDLY
Each Senior Officer has a responsibility to the Fund to act with
integrity. Integrity requires, among other things, being honest and candid.
Deceit and subordination of principle are inconsistent with integrity.
Each Senior Officer must:
o act with integrity, including being honest and candid while still
maintaining the confidentiality of information where required by law
or the Additional Conflict Rules;
o comply with the laws, rules and regulations that govern the conduct
of the Fund's operations and report any suspected violations thereof
in accordance with the section below entitled "Compliance With Code
Of Ethics"; and
o adhere to a high standard of business ethics.
CONFLICTS OF INTEREST
A conflict of interest for the purpose of this Code of Ethics occurs when
your private interests interfere in any way, or even appear to interfere, with
the interests of the Fund.
Senior Officers are expected to use objective and unbiased standards when
making decisions that affect the Fund, keeping in mind that Senior Officers are
subject to certain inherent conflicts of interest because Senior Officers of a
Fund also are or may be officers of the Adviser and other funds advised or
serviced by the Adviser (as a result of which it is incumbent upon you to be
familiar with and to seek to comply with the Additional Conflict Rules).
You are required to conduct the business of the Fund in an honest and
ethical manner, including the ethical handling of actual or apparent conflicts
of interest between personal and business relationships. When making any
investment, accepting any position or benefits, participating in any transaction
or business arrangement or otherwise acting in a manner that creates or appears
to create a conflict of interest with respect to the Fund where you are
receiving a personal benefit, you should act in accordance with the letter and
spirit of this Code of Ethics.
If you are in doubt as to the application or interpretation of this Code
of Ethics to you as a Senior Officer of the Fund, you should make full
disclosure of all relevant facts and circumstances to the general counsel of
Tennenbaum Capital Partners, LLC (the "General Counsel") and obtain the approval
of the General Counsel prior to taking action.
Some conflict of interest situations that should always be approved by the
General Counsel, if material, include the following:
o the receipt of any entertainment or non-nominal gift by the Senior
Officer, or a member of his or her family, from any company with
which the Fund has current or prospective business dealings (other
than the Adviser), unless such entertainment or gift is business
related, reasonable in cost, appropriate as to time and place, and
not so frequent as to raise any question of impropriety;
o any ownership interest in, or any consulting or employment
relationship with, any of the Fund's service providers, other than
the Adviser or a subsidiary of the Fund; or
o a direct or indirect financial interest in commissions, transaction
charges or spreads paid by the Fund for effecting portfolio
transactions or for selling or redeeming shares other than an
interest arising from the Senior Officer's employment by the
Adviser, such as compensation or equity ownership.
DISCLOSURES
It is the policy of the Fund to make full, fair, accurate, timely and
understandable disclosure in compliance with all applicable laws and regulations
in all reports and documents that the Fund files with, or submits to, the
Securities and Exchange Commission or a national securities exchange and in all
other public communications made by the Fund. As a Senior Officer, you are
required to promote compliance with this policy and to abide by the Fund's
standards, policies and procedures designed to promote compliance with this
policy.
Each Senior Officer must:
o familiarize himself or herself with the disclosure requirements
applicable to the Fund as well as the business and financial
operations of the Fund; and
o not knowingly misrepresent, or cause others to misrepresent, facts
about the Fund to others, including to the Directors, the Fund's
independent auditors, the Fund's counsel, counsel to the Independent
Directors, governmental regulators or self-regulatory organizations.
COMPLIANCE WITH CODE OF ETHICS
If you know of or suspect a violation of this Code of Ethics or other
laws, regulations, policies or procedures applicable to the Fund, you must
report that information on a timely basis to the General Counsel. No one will be
subject to retaliation because of a good faith report of a suspected violation.
The Fund will follow these procedures in investigating and enforcing this
Code of Ethics, and in reporting on this Code of Ethics:
o the General Counsel will take all appropriate action to investigate
any actual or potential violations reported to him or her;
o violations and potential violations will be reported to the Board
after such investigation;
o if the Board determines that a violation has occurred, it will take
all appropriate disciplinary or preventive action; and
o appropriate disciplinary or preventive action may include a letter
of censure, suspension, dismissal or, in the event of criminal or
other serious violations of law, notification of the Securities and
Exchange Commission or other appropriate law enforcement
authorities.
WAIVERS OF CODE OF ETHICS
Except as otherwise provided in this Code of Ethics, the General Counsel
is responsible for applying this Code of Ethics to specific situations in which
questions are presented to the General Counsel and has the authority to
interpret this Code of Ethics in any particular situation. The General Counsel
shall take all action he or she considers appropriate to investigate any actual
or potential violations reported under this Code of Ethics.
The General Counsel is authorized to consult, as appropriate, with counsel
to the Fund, the Adviser or the Independent Directors, and is encouraged to do
so.
The Board is responsible for granting waivers of this Code of Ethics, as
appropriate. Any changes to or waivers of this Code of Ethics will, to the
extent required, be disclosed on Form N-CSR, or otherwise, as provided by
Securities and Exchange Commission rules.
RECORDKEEPING
The Fund will maintain and preserve for a period of not less than six (6)
years from the date an action is taken, the first two (2) years in an easily
accessible place, a copy of the information or materials supplied to the Board:
o that provided the basis for any amendment or waiver to this Code of
Ethics; and
o relating to any violation of this Code of Ethics and sanctions
imposed for such violation, together with a written record of the
approval or action taken by the Board.
CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code of
Ethics shall be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code of Ethics, such
matters shall not be disclosed to anyone other than the Independent Directors
and their counsel, the Fund (including the Board) and its counsel, the Adviser
and its counsel and any other advisors, consultants or counsel retained by the
Directors, the Independent Directors or any committee of the Directors.
AMENDMENTS
This Code of Ethics may not be amended except in written form, which is
specifically approved by a majority vote of the Directors, including a majority
of the Independent Directors.
NO RIGHTS CREATED
This Code of Ethics is a statement of certain fundamental principles,
policies and procedures that govern each of the Senior Officers in the conduct
of the Fund's business. It is not intended to and does not create any rights in
any employee, investor, supplier, competitor, shareholder or any other person or
entity.