Exhibit H.1
PIMCO Municipal Income Fund
[_] Common Shares of Beneficial Interest
No Par Value
UNDERWRITING AGREEMENT
June 26, 2001
UNDERWRITING AGREEMENT
June 26, 2001
UBS Warburg LLC
CIBC World Markets Corp.
X.X. Xxxxxxx & Sons, Inc.
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
PIMCO Municipal Income 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 common
shares of beneficial interest (the "Firm Shares"), no par value (the "Common
Shares"), of the Fund. In addition, solely for the purpose of covering
over-allotments, the Fund proposes to grant to the Underwriters the option to
purchase from the Fund up to an additional Common Shares (the
"Additional Shares"). The Firm Shares and the Additional Shares are hereinafter
collectively sometimes referred to as the Shares. The Shares are described in
the Prospectus which is referred to below.
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 "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. 333-61062 and 811-10377), including a prospectus and a statement of
additional information, relating to the Shares. The Fund has furnished to you,
for use by the Underwriters and by dealers, copies of one or more preliminary
prospectuses (including a preliminary statement of additional information) (each
thereof, including such preliminary statement of additional information, being
herein called a "Preliminary Prospectus") relating to the Shares. Except where
the context otherwise requires, the registration statement, as amended when it
becomes effective (the "Effective Date"), including all documents filed as a
part thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 497 under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Act is
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herein called the Registration Statement, and the prospectus (including the
statement of additional information), in the form filed by the Fund with the
Commission pursuant to Rule 497 under the Act or, if no such filing is required,
the form of final prospectus (including the form of final statement of
additional information) included in the Registration Statement at the time it
became effective, is herein called the Prospectus. 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.
PIMCO Advisors L.P. ("PIMCO Advisors," or the "Investment Manager")
will act as the Fund's investment manager pursuant to an Investment Management
Agreement by and between the Fund and the Investment Manager, dated as of June
29, 2001 (the "Investment Management Agreement"). Pacific Investment Management
Company LLC ("PIMCO," or the "Portfolio Manager") will act as the Fund's
Portfolio Manager pursuant to a Portfolio Management Agreement by and among the
Fund, the Investment Manager and PIMCO, dated as of June 29, 2001. State Street
Bank & Trust Co. will act as the custodian (the "Custodian") of the Fund's cash
and portfolio assets pursuant to a Custodian Agreement, dated as of June 29,
2001 (the "Custodian Agreement"). PFPC Inc. will act as the Fund's transfer
agent, registrar, shareholder servicing agent and dividend disbursing agent (the
"Transfer Agent") pursuant to a Transfer Agency Services Agreement, dated as of
June 29, 2001 (the "Transfer Agency Agreement"). In addition, the Fund has
adopted a dividend reinvestment plan (the "Dividend Reinvestment Plan") pursuant
to which holders of Shares shall have their dividends automatically reinvested
in additional Common Shares of the Fund unless they elect to receive such
dividends in cash.
The Fund, the Investment Manager 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, agrees to purchase from the Fund the aggregate
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto in each case at a purchase price of $14.325 per
Share. The Fund is advised that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Shares as soon
after the effective date of the Registration Statement as is advisable and
(ii) initially to offer the Firm 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.
In addition, the Fund hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth,
the Underwriters shall have the right to purchase, severally and not
jointly, from the Fund, ratably in accordance with the number of Firm
Shares to be purchased by each of them, all or a portion of the Additional
Shares as may be necessary to cover over-allotments made in connection with
the offering of the Firm Shares, at the same purchase price per
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share to be paid by the Underwriters to the Fund for the Firm Shares. This
option may be exercised by you on behalf of the several Underwriters at any
time and from time to time on or before the forty-fifth day following the
date hereof, by written notice to the Fund. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the "Additional
Time of Purchase"); provided, however, that the Additional Time of Purchase
shall not be earlier than the Time of Purchase (as defined below) nor
earlier than the second business day after the date on which the option
shall have been exercised nor later than the tenth business day after the
date on which the option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number which
bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of
such Underwriter on Schedule A hereto bears to the total number of Firm
Shares (subject, in each case, to such adjustment as you may determine to
eliminate fractional shares).
The Fund also agrees, subject to the terms and conditions set forth
herein, to sell to the Investment Manager, and, upon the basis of the
representations, warranties and agreements of the Fund contained herein,
the Investment Manager shall have the right to purchase from the Fund, at
the same purchase price per share as the Underwriters shall pay for the
Additional Shares, up to an aggregate of [ ] Shares (the
"Investment Manager Shares").
Simultaneous with delivery to the Underwriters of, and payment by the
Underwriters for, the Shares, the Investment Manager or an affiliate
thereof will pay to UBS Warburg LLC (the "Managing Representative")
additional compensation in connection with the sale and distribution of the
Shares in the form of a structuring and advisory fee in an aggregate amount
equal to $ by certified or official bank check or checks
payable in same-day funds or wire transfer.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares
shall be made by the Underwriters to the Fund by Federal Funds wire
transfer, against delivery of the certificates for the Firm 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 you and the Fund). The time at which such
payment and delivery are actually made is hereinafter sometimes called the
Time of Purchase. Certificates for the Firm Shares 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 Time of Purchase. For the
purpose of expediting the checking of the certificates for the Firm Shares
by you, the Fund agrees to make such certificates available to you for such
purpose at least one full business day preceding the Time of Purchase.
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Payment of the purchase price for the Additional Shares shall be made
at the Additional Time of Purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in
such denominations as you shall specify no later than the second business
day preceding the Additional Time of Purchase. For the purpose of
expediting the checking of the certificates for the Additional Shares by
you, the Fund agrees to make such certificates available to you for such
purpose at least one full business day preceding the Additional Time of
Purchase. The Time of Purchase and the Additional Time of Purchase are
sometimes referred to herein as the Closing Dates.
The place and time of the closing for the Investment Manager Shares
shall be as agreed upon by the Investment Manager and the Fund; provided,
however, that the date of such closing for the Investment Manager Shares
shall in no event be earlier than the Time of Purchase.
3. Representations and Warranties of the Fund and the Investment Manager.
Each of the Fund and the Investment Manager jointly and severally
represents and warrants to each Underwriter as follows:
(a) On (A) the Effective Date and the date on which the Prospectus is
first filed with the Commission pursuant to Rule 497(b), (h) or (j)
under the Act, as the case may be, (B) the date on which any post-
effective amendment to the Registration Statement (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) became
or becomes effective or any amendment or supplement to the Prospectus
was or is filed with the Commission and (C) the Closing Dates, the
Registration Statement, the Prospectus and any such amendment or
supplement thereto and the Notification complied or will comply in all
material respects with the requirements of the Act and the Investment
Company Act, as the case may be. On the Effective Date and on the
date that any post-effective amendment to the Registration Statement
(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) became or becomes effective, neither the
Registration Statement nor any such amendment did or will contain any
untrue statement of a material fact or omit to state a material fact
required to be stated in it or necessary to make the statements in it
not misleading. At the Effective Date and, if applicable, the date
the Prospectus or any amendment or supplement to the Prospectus was or
is filed with the Commission and at the Closing Dates, the Prospectus
did not or will not, as the case may be, contain any untrue statement
of a material fact or omit to state a material fact required to be
stated in it or necessary to make the statements in it, in light of
the circumstances under which they were made, not misleading. The
foregoing representations in
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this Section 3(a) do not apply to statements or omissions relating to
the Underwriters made in reliance on and in conformity with
information furnished in writing to the Fund by the Underwriters
expressly for use in the Registration Statement, the Prospectus, or
any amendments or supplements thereto, as described in Section 9(f)
hereof.
(b) The Fund has been duly formed, is validly existing as an
unincorporated voluntary association under the laws of The
Commonwealth of Massachusetts (commonly known as a "Massachusetts
business trust"), 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 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, except where the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Fund, 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
Prospectus. The Fund has no subsidiaries.
(c) The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The Common Shares conform in all
material respects to the description of them in 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).
Other than the right of the Investment Manager to purchase Shares as
set forth in Section 1 hereof, 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 non-diversified, closed-end management investment
company, and, subject to the filing of a final amendment to the
Registration Statement (the "Final Amendment"), if not already filed,
all action under the 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 Management Agreement, the
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Portfolio Management Agreement, the Custodian Agreement, the Transfer
Agency 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 Agreement and Declaration of Trust or
the Bylaws of the Fund, as amended from time to time, or any agreement
or instrument to which the Fund is a party or by which the Fund is
bound, except where such violation does not have a material adverse
effect on the condition (financial or other), business prospects,
properties, net assets or results of operations of the Fund, 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, except where such violation does
not have a material adverse effect on the condition (financial or
other), business prospects, properties, net assets or results of
operations of the Fund.
(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
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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) have been obtained under the Act, the Investment Company Act or
the Advisers Act, and (ii) 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 this Underwriting Agreement.
(j) The Shares are duly authorized for listing, subject to official notice
of issuance, on the New York Stock Exchange and the Fund's
Registration Statement on Form 8-A, under the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder
(collectively called the "Exchange Act"), has become effective.
(k) PricewaterhouseCoopers LLP, whose report appears in the Prospectus,
are independent public accountants with respect to the Fund as
required by the Act and the Investment Company Act.
(l) The statement of assets and liabilities included in the Registration
Statement 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 and the Prospectus, except as otherwise stated therein, (i)
there has been no material adverse change in the condition, financial
or otherwise, business affairs or business 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.
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(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 or 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.
(p) Except for stabilization transactions conducted by the Managing
Representative, and except for tender offers, Share repurchases and
the issuance or purchase of Shares pursuant to the Dividend
Reinvestment Plan effected following the date on which the
distribution of the Shares is completed in accordance with the
policies of the Fund as set forth in the Prospectus, the Fund has not
taken and will not take, directly or indirectly, any action designed
or which might be reasonably expected to cause or result in, or which
will constitute, stabilization or manipulation of the price of the
Common Shares in violation of applicable federal securities laws,
provided that, for the sake of clarity, no action taken by an
Underwriter that is an affiliate of the Fund shall be deemed to be
action taken, directly or indirectly, by the Fund for purposes of this
Section 3(p).
(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) All advertising and sales literature authorized or prepared by or on
behalf of the Fund, the Investment Manager or PIMCO for use in
connection with the public offering or sale of the Shares
(collectively referred to as the "sales materials") complied and
comply in all material respects with the applicable requirements of
the Act and the rules and interpretations of the NASD; and no sales
materials contained or contain 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 in which they were made, not misleading.
4. Representations and Warranties of the Investment Manager. The Investment
Manager represents to each Underwriter and, in the case of paragraph (f)
also to the Fund, as follows:
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(a) The Investment Manager has been duly formed, is validly existing as a
limited partnership under the laws of the state of Delaware 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 and
Prospectus, and the Investment Manager 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 effect on the Investment Manager's ability to provide services
to the Fund; and the Investment Manager 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 and the Prospectus.
(b) The Investment Manager 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 and the Prospectus.
(c) The Investment Manager has full power and authority to enter into each
of this Underwriting Agreement, the Investment Management Agreement
and the Portfolio Management Agreement (collectively, this
Underwriting Agreement, the Investment Management Agreement and the
Portfolio Management Agreement being referred to as the "Investment
Manager Agreements") and to carry out all the terms and provisions
hereof and thereof to be carried out by it; and each Investment
Manager Agreement has been duly and validly authorized, executed and
delivered by the Investment Manager; none of the Investment Manager
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 Investment Manager Agreement constitutes a
legal, valid and binding obligation of the Investment Manager,
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 Manager of
any Investment Manager Agreement nor (ii) the consummation by the
Investment Manager of the transactions contemplated by, or the
performance of its obligations under, any Investment Manager Agreement
conflicts or will conflict with, or results or will result in a breach
of, the limited partnership agreement or other organizational
documents of the
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Investment Manager or any agreement or instrument to which the
Investment Manager is a party or by which the Investment Manager 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
Manager.
(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
Manager of its obligations under, any Investment Manager Agreement, as
the case may be, except such as (i) have been obtained under the Act,
the Investment Company Act or the Advisers Act, and (ii) 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 this Underwriting
Agreement.
(f) The description of the Investment Manager and its business, and the
statements attributable to the Investment Manager, in the Registration
Statement and the Prospectus comply with the requirements of the 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
not misleading.
(g) 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 Manager, threatened against or
affecting the Investment Manager of a nature required to be disclosed
in the Registration Statement or Prospectus or that might reasonably
be expected to result in any material adverse change in the ability of
the Investment Manager to fulfill its respective obligations under any
Investment Manager Agreement.
(h) Except for stabilization activities conducted by the Managing
Representative and except for tender offers, Share repurchases and the
issuance or purchase of Shares pursuant to the Dividend Reinvestment
Plan effected following the date on which the distribution of the
Shares is completed in accordance with the policies of the Fund as set
forth in the Prospectus, the Investment Manager has not taken and will
not take, directly or indirectly, any action designed, or which might
reasonably be expected to cause or result in, or which will
constitute, stabilization or manipulation of the price of the Common
Shares in violation of applicable federal securities laws, provided
that, for the sake of clarity, no action taken by an Underwriter that
is an affiliate of the Investment Manager shall be deemed to be action
taken, directly or indirectly, by the Investment Manager for purposes
of this Section 4(h).
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(i) In the event that the Fund, the Investment Manager or the Portfolio
Manager makes available any promotional materials intended for use
only by qualified broker-dealers and registered representatives
thereof by means of an Internet web site or similar electronic means,
the Investment Manager will install and maintain pre-qualification and
password-protection or similar procedures which will effectively
prohibit access to such promotional materials by persons other than
qualified broker-dealers and registered representatives thereof.
(j) The Portfolio Manager has been duly formed, is validly existing as a
limited liability company under the laws of Delaware 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 and Prospectus,
and the Portfolio Manager 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 Portfolio Manager's ability to provide services to the
Fund; and the Portfolio Manager 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 and the Prospectus.
(k) The Portfolio Manager 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 sub-adviser
for the Fund as contemplated by the Portfolio Management Agreement,
the Registration Statement and the Prospectus.
(l) The Portfolio Manager has full power and authority to enter into each
of this Underwriting Agreement and the Portfolio Management Agreement
(collectively, this Underwriting Agreement and the Portfolio
Management Agreement being referred to as the "Portfolio Manager
Agreements") and to carry out all the terms and provisions hereof and
thereof to be carried out by it; and each Portfolio Manager Agreement
has been duly and validly authorized, executed and delivered by the
Portfolio Manager; none of the Portfolio Manager 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 Portfolio Manager Agreement constitutes a legal, valid and
binding obligation of the Portfolio Manager, 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
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as rights to indemnity thereunder may be limited by federal or state
securities laws.
(m) Neither (i) the execution and delivery by the Portfolio Manager of any
Portfolio Manager Agreement nor (ii) the consummation by the Portfolio
Manager of the transactions contemplated by, or the performance of its
obligations under, any Portfolio Manager Agreement conflicts or will
conflict with, or results or will result in a breach of, the limited
liability company agreement or other organizational documents of the
Portfolio Manager or any agreement or instrument to which the
Portfolio Manager is a party or by which the Portfolio Manager 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 Portfolio
Manager.
(n) 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 Portfolio
Manager of its obligations under, any Portfolio Manager Agreement, as
the case may be, except such as (i) have been obtained under the Act,
the Investment Company Act or the Advisers Act, and (ii) 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 this Underwriting
Agreement.
(o) The description of the Portfolio Manager and its business, and the
statements attributable to the Portfolio Manager, in the Registration
Statement and the Prospectus comply with the requirements of the 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
not misleading.
(p) 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 Portfolio Manager, threatened against or
affecting the Portfolio Manager of a nature required to be disclosed
in the Registration Statement or Prospectus or that might reasonably
be expected to result in any material adverse change in the ability of
the Portfolio Manager to fulfill its respective obligations under any
Portfolio Manager Agreement.
(q) Except for stabilization activities conducted by the Managing
Representative and except for tender offers, Share repurchases and the
issuance or purchase of Shares pursuant to the Dividend Reinvestment
Plan effected following the date on which the distribution of the
Shares is completed in accordance with the policies of the Fund as set
forth in the
13
Prospectus, the Portfolio Manager has not taken and will not take,
directly or indirectly, any action designed, or which might reasonably
be expected to cause or result in, or which will constitute,
stabilization or manipulation of the price of the Common Shares in
violation of applicable federal securities laws.
5. Agreements of the Parties.
(a) If the registration statement relating to the Shares has not yet
become effective, the Fund will promptly file the 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 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 Act, the Fund will file a 430A Prospectus pursuant to Rule 497(h)
under the 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 Date. 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 Act as
promptly as practicable, but no later than the fifth business day
following the date of the later of the Effective Date or the
commencement of the public offering of the Shares after the Effective
Date. In either case, the Fund will provide you 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 (1) of the issuance by the
Commission of any order in respect of the Fund, the Investment Manager
or the Portfolio Manager which relates to the Fund, or which relates
to any material arrangements or proposed material arrangements
involving the Fund, the Investment Manager or the Portfolio Manager,
(2) of the initiation or threatening of any proceedings for, or
receipt by the Fund of any notice with respect to, the suspension of
the 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, (3) of receipt
14
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 Prospectus or to the transactions
contemplated by this Underwriting Agreement and (4) 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 you, the Underwriters and any dealers, at such office or offices as
you may designate, as many copies of the Prospectus as you 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 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, 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 Act and the Investment
15
Company Act; provided that if the amendment or supplement is required
exclusively as a result of a misstatement in or omission from the
information provided to the Fund in writing by the Underwriters
expressly for use in the Prospectus, the Fund may deliver such
amendment or supplement to the Underwriters and dealers at a
reasonable charge not to exceed the actual cost thereof to the Fund.
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 Effective Date falls, an earnings statement, if applicable,
satisfying the provisions of the last paragraph of Section 11(a) of
the Act and, at the option of the Fund, Rule 158 under the Act.
(f) The Fund will take such actions as the Managing Representative
reasonably requests in order to qualify the Shares for offer and sale
under the securities or "blue sky" laws of such jurisdictions as the
Managing Representative reasonably designates; provided that the Fund
shall not be required in connection therewith or as a condition
thereof to qualify as a foreign corporation or as a dealer in
securities or to execute a general consent to service of process in
any jurisdiction.
(g) If the transactions contemplated by this Underwriting Agreement are
consummated, the Fund shall pay all costs and expenses incident to the
performance of the obligations of the Fund under this Underwriting
Agreement (to the extent such expenses do not, in the aggregate,
exceed $0.03 per Share), including but not limited to costs and
expenses of or relating to (1) the preparation, printing and filing of
the Registration Statement and exhibits to it, each Preliminary
Prospectus, the Prospectus and all amendments and supplements thereto,
(2) the issuance of the Shares and the preparation and delivery of
certificates for the Shares, (3) the registration or qualification of
the Shares for offer and sale under the securities or "blue sky" laws
of the jurisdictions referred to in the foregoing paragraph, including
the fees and disbursements of counsel for the Underwriters in that
connection, and the preparation and printing of any preliminary and
supplemental "blue sky" memoranda, (4) the furnishing (including costs
of design, production, shipping and mailing) to the Underwriters and
dealers of copies of each Preliminary Prospectus relating to the
Shares, the sales materials, the Prospectus, and all amendments or
supplements to the Prospectus, and of the other documents required by
this Section to be so furnished, (5) the filing requirements of the
NASD, in connection with its review of the financing, including filing
fees and the fees, disbursements and other charges of counsel for the
Underwriters in that connection, (6) all transfer taxes, if any, with
respect to the sale and delivery of the Shares to the Underwriters,
(7) the listing of
16
the Shares on the New York Stock Exchange, and (8) the transfer agent
for the Shares. To the extent the foregoing costs and expenses
incident to the performance of the obligations of the Fund under this
Underwriting Agreement exceed, in the aggregate, $0.03 per Share,
PIMCO Advisors or an affiliate will pay all such excess costs and
expenses.
(h) 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 (A) the Fund or the Investment
Manager pursuant to any of the provisions hereof or (B) by you or the
Underwriters because of any inability, failure or refusal on the part
of the Fund or the Investment Manager to comply with any material
terms or because any of the conditions in Section 6 are not satisfied,
the Investment Manager or an affiliate 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 Manager and the other
Underwriters for damages occasioned by its default.
(i) 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 Effective Date, except for the Shares as described in the
Prospectus and any issuances of Common Shares pursuant to the Dividend
Reinvestment Plan and except in connection with any offering of
preferred shares of beneficial interest as contemplated by the
Prospectus.
(j) The Fund will use its best efforts to cause the Shares to be duly
authorized for listing by the New York Stock Exchange prior to the
date the shares are issued and to comply with the rules and
regulations of such exchange.
(k) 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.
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 on each of the Closing Dates, of the
representations of the Fund and the Investment Manager in this Underwriting
Agreement, to the accuracy and completeness of all material statements made
by the Fund and the Investment Manager or any of their respective officers
in any certificate delivered to the Managing Representative or its counsel
pursuant to this Underwriting
17
Agreement, to performance by the Fund and the Investment Manager of their
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 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 and the Prospectus, (i) there must not have been any
material change in the Common Shares or liabilities of the Fund except
as set forth in or contemplated by 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, the Investment Manager or the Portfolio
Manager whether or not arising from transactions in the ordinary
course of business as set forth in or contemplated by the Prospectus;
(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 and 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 or Prospectus or that is not reflected in the Registration
Statement or Prospectus but should be reflected therein in order to
make the statements or information therein (in the case of the
Prospectus, in light of the circumstances in which they were made) not
misleading in any material respect.
(d) The Managing Representative must have received on each Closing Date a
certificate, dated such date, of the President or a Vice-President and
the chief financial or accounting officer of each of the Fund, the
Investment Manager and the Portfolio Manager certifying that (i) the
signers have carefully examined the Registration Statement, the
Prospectus, and this Underwriting Agreement, (ii) the representations
of the Fund (with respect to the certificates from such Fund
officers), the representations of the
18
Investment Manager (with respect to the certificates from such
officers of the Investment Manager) and the representations of the
Portfolio Manager (with respect to the certificates from such officers
of the Portfolio Manager) 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) the
Investment Manager (with respect to the certificates from such
officers of the Investment Manager) or the Portfolio Manager (with
respect to the certificates from such officers of the Portfolio
Manager), which change would materially and adversely affect the
ability of the Fund, the Investment Manager or the Portfolio Manager,
as the case may be, to fulfill its obligations under this Underwriting
Agreement, the Investment Advisory Agreement or the Portfolio
Management Agreement, 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 threatened by the
Commission or any other regulatory body, whether foreign or domestic,
(v) to the knowledge of the officers of the Investment Manager, after
reasonable investigation, no order having a material adverse effect on
the ability of the Investment Manager 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 threatened by the Commission or any
other regulatory body, whether foreign or domestic, (vi) to the
knowledge of the officers of the Portfolio Manager, after reasonable
investigation, no order having a material adverse effect on the
ability of the Portfolio Manager to fulfill its obligations under this
Underwriting Agreement or the Portfolio Management Agreement, as the
case may be, has been issued and no proceedings for any such purpose
are pending before or threatened by the Commission or any other
regulatory body, whether foreign or domestic, and (vii) each of the
Fund (with respect to the certificates from such Fund officers), the
Investment Manager (with respect to the certificates from such
officers of the Investment Manager) and the Portfolio Manager (with
respect to the certificates from such officers of the Portfolio
Manager) has performed all of its respective agreements that this
Underwriting Agreement requires it to perform by such Closing Date (to
the extent not waived in writing by the Managing Representative).
(e) You must have received on each Closing Date the opinions dated such
Closing Date substantially in the form of Schedules B and C and to
this Underwriting Agreement from the counsel identified in each such
19
Schedules, or in such other form as is acceptable to counsel for the
Underwriters.
(f) You must have received on each Closing Date from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP and its affiliated entities an opinion dated such
Closing Date 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, the Investment Manager and the Portfolio
Manager 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 firm of accountants designated in such
Schedule. The Managing Representative also must have received on each
Closing Date a signed letter from such accountants, dated as of such
Closing Date, 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 such Closing Date, that would require any change in their
letter referred to in the foregoing sentence.
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 effectiveness of the Registration Statement
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;
(b) at or before any Closing Date if, in the sole judgment of the Managing
Representative, payment for and delivery of any 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
20
that lists the Shares, (ii) trading in securities generally on the New
York Stock Exchange 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 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) at or before any Closing Date, 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 on any Closing Date the Shares agreed
to be purchased on such Closing Date 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 such Closing Date, and
(a) the number of Shares to be purchased by the defaulting Underwriters on
such Closing Date does not exceed 10% of the Shares that the
Underwriters are obligated to purchase on such Closing Date, 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 on
such Closing Date exceeds 10% of the Shares to be purchased by all the
Underwriters on such Closing Date, the Fund will be entitled to an
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.
21
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 applicable Closing Date for not more than five
business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
the Prospectus) may be effected by the Managing Representative and the
Fund. If the number of Shares to be purchased on such Closing Date by such
defaulting Underwriter or Underwriters exceeds 10% of the Shares that the
Underwriters are obligated to purchase on such Closing Date, 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, the Investment Manager or the Portfolio Manager,
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 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 Manager, 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 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, any such Underwriter or any such person
may incur under the 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 the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Fund) or in a Prospectus (the term "Prospectus" for the purpose of
this Section 10 being deemed to include any Preliminary Prospectus,
the sales materials, the Prospectus and the Prospectus as amended or
supplemented 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 in either such Registration Statement or Prospectus or
necessary to make the statements made therein (with respect to the
Prospectus, in light of the circumstances under which they were made)
not misleading, except 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
any Underwriter to the Fund, the Investment Manager or the Portfolio
Manager expressly for use
22
with reference to any Underwriter in such Registration Statement or
such 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 such Registration Statement or
such Prospectus or necessary to make such information (with respect to
the Prospectus, in light of the circumstances under which they were
made) not misleading, provided, however, that the indemnity agreement
contained in this subsection (a) with respect to any Preliminary
Prospectus or amended Preliminary Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such
loss, damage, expense, liability or claim purchased the Shares which
is the subject thereof if the Prospectus corrected any such alleged
untrue statement or omission and if such Underwriter failed to send or
give a copy of the Prospectus to such person at or prior to the
written confirmation of the sale of such Shares to such person, unless
the failure is the result of noncompliance by the Fund with Section
5(d) hereof.
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 Manager
pursuant to the foregoing paragraph, such Underwriter or such person
shall promptly notify the Fund and the Investment Manager in writing
of the institution of such Proceeding and the Fund or the Investment
Manager 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 Manager shall not
relieve the Fund or the Investment Manager from any liability which
the Fund or the Investment Manager 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
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
Manager, as the case may be, in connection with the defense of such
Proceeding or the Fund or the Investment Manager 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 Manager (in which case the Fund, the Investment Manager
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 fees and expenses shall be borne by the Fund or the Investment
Manager and paid as incurred (it being understood, however, that the
Fund or the Investment Manager shall not be liable for the expenses of
more than one
23
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). Neither the Fund nor the Investment Manager 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 Manager, the Fund or the Investment Manager, 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 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 Manager, and each of their
respective shareholders, partners, managers, members, trustees,
directors and officers, and any person who controls the Fund or the
Investment Manager within the meaning of Section 15 of the 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 Manager or any
such person may incur under the 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 Manager 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
24
Fund) or in a 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 such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Fund, the Investment
Manager or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Fund,
the Investment Manager 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 Manager or any such person or otherwise. The
Fund, the Investment Manager 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
Manager 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 Manager 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
25
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.
(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 Manager 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 Manager 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 Manager 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 Manager 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
Manager 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,
26
damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Fund, the Investment Manager 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 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 Act
or Section 20 of the Exchange Act, or by or on behalf of the Fund or
the Investment Manager, its shareholders, partners, managers, members,
trustees, directors or officers or any person who controls the Fund or
the Investment Manager within the meaning of Section 15 of the 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
and the Investment Manager 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 Manager, against any of
the Fund's or the Investment Manager'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 Manager each acknowledge that the
statements with respect to (1) the public offering of the Shares as
set forth on the cover page of and (2) stabilization and selling
concessions and reallowances of selling concessions under the caption
"Underwriting" in the Prospectus constitute the only information
furnished in writing to the Fund by the Underwriters expressly for use
in such document. The Underwriters severally confirm that these
statements are correct in all
27
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 or gross
negligence in the performance of its duties hereunder.
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 Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Fund or the Investment Manager, shall
be sufficient in all respects if delivered or sent to the Fund or the
Investment Manager, as the case may be, at the offices of the Fund or the
Investment Manager at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
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 consents to the jurisdiction of such courts and personal service
with respect thereto. The Fund and UBS Warbug 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 Warburg LLC or any indemnified party. Each of UBS Warburg LLC,
the Fund (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) and the Investment Manager (on
its behalf and, to the extent permitted by applicable law, on behalf of its
members 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 Agreement. Each of the Fund
and the Investment Manager 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 Manager, as the case may be,
and may be enforced in any other courts in the jurisdiction of which the
Fund or the Investment Manager, as the case may be, is or may be subject,
by suit upon such judgment.
28
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
Manager 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 Manager, and any successor or
assign of any substantial portion of the Fund's, the Investment Manager'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 the Fund 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
by an officer or Trustee of the Fund in his or her capacity as an officer
or Trustee of the Fund 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.
29
If the foregoing correctly sets forth the understanding among the Fund, the
Investment Manager 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 Manager and the Underwriters,
severally.
Very truly yours,
PIMCO MUNICIPAL INCOME FUND
__________________________
By:
Title:
PIMCO ADVISORS, L.P.
__________________________
By:
Title:
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 WARBURG LLC
CIBC WORLD MARKETS CORP.
X.X. XXXXXXX & SONS, INC.
By: UBS WARBURG LLC
__________________________
By: Xxxx X. Reit
Title: Executive Director
30
SCHEDULE A
Number of Shares
Name to be Purchased
---- ---------------
--
UBS Warburg
CIBC World Markets Corp.
X.X. Xxxxxxx & Sons, Inc.
Total
31
SCHEDULE B
FORM OF OPINION OF
ROPES & XXXX REGARDING THE FUND
i. The Registration Statement and all post-effective amendments, if any, are
effective under the 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 under the Act prior to the date
hereof have been made in the manner and within the time required by such rule.
ii. 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 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 Prospectus.
The Fund has no subsidiaries.
iii. The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The Common Shares of the Fund conform in all
respects to the description of them in the Prospectus. All the outstanding
Common Shares 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.
A-2
iv. The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment company and
all action under the 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 the Underwriting Agreement has or will have been taken by the Fund.
v. The Fund has full power and authority to enter into each of the
Underwriting Agreement, the Investment Management Agreement, the Custodian
Agreement and the Transfer Agency 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 and the Advisers Act, 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.
vi. 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
By-laws 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.
vii. 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.
viii. 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 Act and the Investment Company Act 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.
A-3
ix. The Shares have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance, and the Fund's Registration Statement on
Form 8-A under the 1934 Act is effective.
x. 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
Prospectus that is not disclosed in 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.
xi. 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.
xii. Each of the sections in the Prospectus entitled "Tax matters" and the
section in the Statement of Additional Information entitled "Tax matters" 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.
xiii. 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 Act and the Investment Company Act.
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 Act and the Investment Company Act and have
rendered other legal advice and assistance to the Fund in the course of its
preparation of the Registration Statement 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 and 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 or 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
A-4
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).
A-5
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING PIMCO ADVISORS, L.P AND PIMCO
i. PIMCO Advisors has been duly formed and is validly existing as a limited
partnership 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 and Prospectus, and PIMCO Advisors is duly
licensed and qualified and in good standing in each other jurisdiction in which
it is required to be so qualified and PIMCO Advisors owns, possesses or has
obtained and currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations, whether foreign or domestic,
necessary for PIMCO Advisors to carry on its business as contemplated in the
Registration Statement and the Prospectus.
ii. PIMCO Advisors is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund as contemplated by the
Investment Advisory Agreement, the Registration Statement and the Prospectus.
iii. PIMCO Advisors has full power and authority to enter into each of the
Underwriting Agreement, the Investment Management Agreement and the Portfolio
Management Agreement (collectively, the "Investment Manager 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
PIMCO Advisors; each Investment Manager Agreement complies in all material
respects with all provisions of the Investment Company Act and the Advisers Act;
and assuming due authorization, execution and delivery by the other parties
thereto, each Investment Manager Agreement constitutes a legal, valid and
binding obligation of PIMCO Advisors, 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.
iv. Neither (A) the execution and delivery by PIMCO Advisors of any
Investment Manager Agreement nor (B) the consummation by PIMCO Advisors of the
transactions contemplated by, or the performance of its obligations under any
Investment Manager Agreement conflicts or will conflict with, or results or will
result in a breach of, the limited partnership agreement or other organizational
documents of PIMCO Advisors or any agreement or instrument to which PIMCO
Advisors is a party or by which PIMCO Advisors 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 PIMCO Advisors.
v. 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 PIMCO Advisors of its obligations under, any Investment
Manager Agreement, except such as have been obtained under the Act, the
Investment Company Act and the Advisers Act.
vi. The description of PIMCO Advisors and its business, and the statements
attributable to PIMCO Advisors, in the Registration Statement and the
Prospectus complies with the requirements of the 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 not misleading.
vii. 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 PIMCO Advisors of a nature required to be disclosed in the
Registration Statement or Prospectus or that might reasonably result in any
material adverse change in the condition, financial or otherwise, business
affairs or business prospects of PIMCO Advisors or the ability of PIMCO Advisors
to fulfill its respective obligations under any Investment Manager Agreement.
viii. PIMCO has been duly formed and is validly existing as a limited
liability company 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 and Prospectus, and PIMCO is duly
licensed and qualified and in good standing in each other jurisdiction in which
it is required to be so qualified and PIMCO owns, possesses or has obtained and
currently maintains all governmental licenses, permits, consents, orders,
approvals and other authorizations, whether foreign or domestic, necessary for
PIMCO to carry on its business as contemplated in the Registration Statement and
the Prospectus.
ix. PIMCO is duly registered as an investment adviser under the Advisers Act
and is not prohibited by the Advisers Act or the Investment Company Act from
acting as investment sub-adviser for the Fund as contemplated by the Portfolio
Management Agreement, the Registration Statement and the Prospectus.
x. PIMCO has full power and authority to enter into the Portfolio Management
Agreement and to carry out all the terms and provisions thereof to be carried
out by it, and such agreement has been duly and validly authorized, executed and
delivered by PIMCO; the Portfolio Management Agreement complies in all material
respects with all provisions of the Investment Company Act and the Advisers Act;
and assuming due authorization, execution and delivery by the other parties
thereto, the Portfolio Management Agreement constitutes a legal, valid and
binding obligation of PIMCO, 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
B-2
in equity or at law) and (2) as rights to indemnity thereunder may be limited by
federal or state securities laws.
xi. Neither (A) the execution and delivery by PIMCO of the Portfolio
Management Agreement nor (B) the consummation by PIMCO of the transactions
contemplated by, or the performance of its obligations under the Portfolio
Management Agreement conflicts or will conflict with, or results or will result
in a breach of, the limited liability company agreement or other organizational
documents of PIMCO or any agreement or instrument to which PIMCO is a party or
by which PIMCO 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 PIMCO.
xii. 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 PIMCO of its obligations under, the Portfolio Management
Agreement, except such as have been obtained under the Act, the Investment
Company Act and the Advisers Act.
xiii. The description of PIMCO and its business, and the statements
attributable to PIMCO, in the Registration Statement and the Prospectus complies
with the requirements of the 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 not misleading.
xiv. 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 PIMCO of a nature required to be disclosed in the
Registration Statement or Prospectus or that might reasonably result in any
material adverse change in the condition, financial or otherwise, business
affairs or business prospects of PIMCO or the ability of PIMCO to fulfill its
respective obligations under the Portfolio Management Agreement.
xv. 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 Act and the Investment Company Act.
In rendering our opinion, we have relied, as to factual matters, upon
the attached written certificates and statements of officers of PIMCO Advisors
and PIMCO.
In connection with the registration of the Shares, we have advised
PIMCO Advisors and PIMCO 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
PIMCO Advisors and PIMCO in the course of the preparation of the registration
Statement and the Prospectus. Rendering
B-3
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, PIMCO Advisors and PIMCO at
which the contents of the registration and 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 or 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).
B-4
SCHEDULE E
FORM OF ACCOUNTANT'S LETTER
June 25, 2001
The Board of Trustees of
PIMCO Municipal Income Fund
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
UBS Warburg 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 PIMCO
Muncipal Income Fund (the "Fund") as of ________, 2001 included in the
Registration Statement on Form N-2 filed by the Fund under the Securities Act of
1933 (the "Act") (File No. 333-61062) and under the Investment Company Act of
1940 (the "1940 Act") (File No. 811-10377); 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 Act and the applicable rules and regulations
thereunder.
2. In our opinion, the statement of assets and liabilities included
in the Registration Statement audited by us complies as to form in all
respects with the applicable accounting requirements of the Act, the 1940
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 _________, 2001, were set forth
therein.
4. Fund officials have advised us that no financial statements as of
any date subsequent to ________, 2001, 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 ________________, 2001,
in the capital shares or net assets of the Fund as compared with amounts
shown in the _____________, 2001, statement of 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,
PRICEWATERHOUSECOOPERS LLP
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