Exhibit h.1
PIMCO New York Municipal Income Fund III
[ ] Common Shares of Beneficial Interest
Par Value $0.00001 per Share
UNDERWRITING AGREEMENT
October [ ], 2002
UNDERWRITING AGREEMENT
October [ ], 2002
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
RBC Xxxx Xxxxxxxx Incorporated
Wachovia Securities, Inc.
Advest, Inc.
Xxxxxxxxxx & Co. Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Quick & Xxxxxx, Inc.
UBS Warburg LLC
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
PIMCO New York Municipal Income Fund III, 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"),
par value $0.00001 per share (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. 333-98583 and 811-21189, 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 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. UBS Warburg LLC (the "Managing
Representative") will act as managing representative for the Underwriters.
PIMCO Funds Advisors LLC (the name of which entity is expected
to be changed to "PIMCO Advisors Fund Management LLC," effective October 31,
2002) ("PIMCO Funds 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 September 17, 2002 (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 between the Investment
Manager and PIMCO, as accepted and agreed to by the Fund, dated as of September
20, 2002. 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 October [ ], 2002 (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 October 31, 2002 (the "Transfer Agency
Agreement"). UBS Warburg LLC will act as a shareholder servicing agent for the
Fund pursuant to a Shareholder Servicing Agreement by and between UBS Warbrug
LLC and the Investment Manager, dated as of October 31, 2002 (the "Shareholder
Servicing 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
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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 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 1,000 Shares
(the "Investment Manager Shares").
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
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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.
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
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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 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
any final amendment to the Registration Statement (a "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
5
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 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, each 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.
6
(h) No person has any right to the registration of any securities
of the Fund because of the filing of the Registration
Statement.
(i) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or
association, whether foreign or domestic, is required by the
Fund for the consummation by the Fund of the transactions to
be performed by the Fund or the performance by the Fund of all
the terms and provisions to be performed by or on behalf of it
in each case as contemplated in the Fund Agreements, except
such as (i) 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) To the knowledge of the Fund and the Investment Manager after
due inquiry, based on representations from
PricewaterhouseCoopers LLP, 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
7
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.
(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) No advertising, sales literature or other promotional
materials (excluding road show slides or road show tapes) were
authorized or prepared by or on behalf of the Fund, the
Investment Manager or the Portfolio Manager or any
representative thereof for use in connection with the public
offering or sale of the Shares other than the definitive
client brochure and the broker selling memo which were filed
with the National Association of Securities Dealers, Inc. (the
"NASD") on September 13, 2002 and the prospecting letter filed
with the NASD on ___________, 2002 (collectively referred to
as the "sales materials"); the sales materials and any road
show slides or road show tapes complied and comply in all
material respects with the applicable requirements of the Act
and the rules and interpretations of the
8
NASD; and no broker kits, road show slides, road show tapes or
sales materials authorized or prepared by the Fund or
authorized or prepared on behalf of the Fund by the Investment
Manager, the Portfolio Manager or any representative thereof
for use in connection with the public offering or sale of the
Shares contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact
required to be stated therein or necessary in order to make
the statements therein 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:
(a) The Investment Manager has been duly formed, is validly
existing as a limited liability company 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, the Shareholder Servicing 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,
9
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
liability company agreement or other organizational documents
of the 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.
10
(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).
(i) In the event that the Fund or the Investment Manager has made
available any promotional materials (other than the sales
materials) intended for use only by qualified broker-dealers
and registered representatives thereof by means of an Internet
web site or similar electronic means, pre-qualification and
password-protection or similar procedures were used
effectively prohibiting 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 the Portfolio Management Agreement and to carry out all
the terms and provisions hereof and thereof to be carried out
by it; and the Portfolio
11
Management Agreement has been duly and validly authorized,
executed and delivered by the Portfolio Manager; the Portfolio
Management Agreement does not 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, the Portfolio
Management 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 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 the Portfolio Management Agreement nor (ii) the
consummation by the Portfolio Manager 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 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,
the Portfolio Management 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
12
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 the Portfolio Management 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
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 any 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.
13
(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, any
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 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
14
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 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) 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 disbursements of counsel for the
Underwriters in that
15
connection, (6) all transfer taxes, if any, with respect to
the sale and delivery of the Shares to the Underwriters, (7)
the listing of 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, the Investment
Manager or an affiliate will pay all such excess costs and
expenses.
(g) If the transactions contemplated by this Underwriting
Agreement are not consummated, except as otherwise provided
herein, no party will be under any liability to any other
party, except that (i) if this Underwriting Agreement is
terminated (A) by 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.
(h) Without the prior written consent of the Managing
Representative, the Fund will not offer, sell or register with
the Commission, or announce an offering of, any equity
securities of the Fund, within 180 days after the 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.
(i) 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.
(j) 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
16
Investment Manager or any of their respective officers in any
certificate delivered to the Managing Representative or its counsel
pursuant to this Underwriting Agreement, to performance by the Fund and
the Investment 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
which in the opinion of the Managing Representative would
materially adversely affect the market for the Shares; (iii)
the Fund must not have sustained any material loss or
interference with its business from any court or from
legislative or other governmental action, order or decree,
whether foreign or domestic, or from any other occurrence not
described in the Registration Statement 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, a
Vice-President or Managing Director and the chief financial or
accounting officer of each of the Fund and the Investment
Manager certifying that (i) the signers have carefully
17
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) and
the representations of the Investment Manager (with respect to
the certificates from such officers of the Investment 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) or the Investment Manager (with respect to the
certificates from such officers of the Investment Manager),
which change would materially and adversely affect the ability
of the Fund or the Investment Manager, as the case may be, to
fulfill its obligations under this Underwriting Agreement or
the Investment 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 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 (vi) each of the Fund (with respect to the
certificates from such Fund officers) and the Investment
Manager (with respect to the certificates from such officers
of the Investment 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, C,
D and E to this Underwriting Agreement from the counsel
identified in each such 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
18
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 F 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 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
19
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.
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
20
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 Investment Manager or to any nondefaulting Underwriters arising out
of such default. A substitute underwriter will become an Underwriter
for all purposes of this Underwriting Agreement.
9. Indemnity and Contribution.
(a) Each of the Fund and the Investment 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 entire Section 9 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
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
21
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 reasonable fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been
authorized in writing by the Fund or the Investment 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 reasonable 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 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
22
indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for reasonable fees and
expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it
shall be liable for any settlement of any Proceeding effected
without its written consent if (i) such settlement is entered
into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of
its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect
of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such
indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Fund and the Investment 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 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 (with respect to the
Prospectus, in light of the circumstances under which they
were made).
If any Proceeding is brought against the Fund, the
Investment Manager or any such person in respect of which
indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Fund, the
23
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
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
24
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, 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
25
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 and payment of fees to Underwriters that meet
certain minimum sales thresholds 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 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
26
reason of such person's willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties 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 and UBS Warburg LLC each consent to the
jurisdiction of such courts and personal service with respect thereto.
The Fund and UBS Warburg 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 unitholders and affiliates) waives all right to trial
by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way arising out of or relating to
this 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.
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
27
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.
28
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 NEW YORK MUNICIPAL
INCOME FUND III
________________________
By:
Title:
PIMCO FUNDS ADVISORS LLC
________________________
By:
Title:
29
Accepted and agreed to as of the
date first above written, on
behalf of themselves and
the other several Underwriters
named in Schedule A
UBS WARBURG LLC
X.X. XXXXXXX & Sons, Inc.
RBC XXXX XXXXXXXX INCORPORATED
WACHOVIA SECURITIES, INC.
ADVEST, INC.
XXXXXXXXXX & Co. Inc.
H&R Block Financial Advisors, Inc.
XXXXXX XXXXXXXXXX XXXXX LLC
QUICK & Xxxxxx, Inc.
By: UBS WARBURG LLC
___________________________
By: Xxxxx Xxxxxxxx
Title: Managing Director
___________________________
By: Xxxx X. Reit
Title: Executive Director
30
SCHEDULE A
--------------------------------------------------------------------------------
Name Number of Shares to be Purchased
---- ---------------------------------
--------------------------------------------------------------------------------
UBS Warburg LLC
--------------------------------------------------------------------------------
X.X. Xxxxxxx & Sons, Inc.
--------------------------------------------------------------------------------
RBC Xxxx Xxxxxxxx Incorporated
--------------------------------------------------------------------------------
Wachovia Securities, Inc.
--------------------------------------------------------------------------------
Advest, Inc.
--------------------------------------------------------------------------------
Xxxxxxxxxx & Co. Inc.
--------------------------------------------------------------------------------
H&R Block Financial Advisors, Inc.
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxxx Xxxxx LLC
--------------------------------------------------------------------------------
Quick & Xxxxxx, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL
--------------------------------------------------------------------------------
B-1
SCHEDULE B
FORM OF OPINION OF
ROPES & XXXX REGARDING THE FUND
October [ ], 2002
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
RBC Xxxx Xxxxxxxx Incorporated
Wachovia Securities, Inc.
Advest, Inc.
Xxxxxxxxxx & Co. Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Quick & Xxxxxx, Inc.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
We have acted as counsel to PIMCO New York Municipal Income Fund III (the
"Fund") in connection with the proposed issuance of [ ] common shares of
beneficial interest (the "Shares"). This opinion is furnished to you pursuant to
Section 7(e) of the Underwriting Agreement dated as of October [___], 2002 (the
"Underwriting Agreement") among the Fund, PIMCO Funds Advisors LLC (the name of
which entity is expected to be changed to "PIMCO Advisors Fund Management LLC,"
effective October 31, 2002) (the "Investment Manager") and UBS Warburg LLC, X.X.
Xxxxxxx & Sons, Inc., RBC Xxxx Xxxxxxxx Incorporated, Wachovia Securities, Inc.,
Advest, Inc., Xxxxxxxxxx & Co. Inc., H&R Block Financial Advisors, Inc., Xxxxxx
Xxxxxxxxxx Xxxxx LLC, and Quick & Xxxxxx, Inc., as representatives of the
underwriters listed on Schedule A thereto (the "Underwriters"). Capitalized
terms used in this opinion, unless otherwise defined, have the meanings
specified in the Underwriting Agreement.
We have examined signed copies of the Registration Statement of the
Fund on Form N-2 (File No. 333-98583) under the Securities Act of 1933, as
amended (the "Securities Act") (which also constitutes the Fund's Registration
Statement on Form N-2 (File No. 811-21189) under the Investment Company Act of
1940, as amended (the "Investment Company Act")), including all exhibits
thereto, as filed with the Securities
B-1
and Exchange Commission (the "Commission") on [ ], 2002 (the "Original
Registration Statement"), Pre-Effective Amendment No. 1 to the Original
Registration Statement, including all exhibits thereto, as filed with the
Commission on [ ], 2002 ("Pre-Effective Amendment No. 1"), Pre-Effective
Amendment No. 2 to the Original Registration Statement, including all exhibits
thereto, as filed with the Commission on [ ], 2002 ("Pre-Effective
Amendment No. 2") and Pre-Effective Amendment No. 3 to the Original Registration
Statement, including all exhibits thereto, as filed with the Commission on
[ ], 2002 ("Pre-Effective Amendment No. 3," and together with Pre-Effective
Amendment No. 1, Pre-Effective Amendment No. 2 and the Original Registration
Statement, the "Registration Statement"); the Fund's Notification of
Registration on Form N-8A under the Investment Company Act, as filed with the
Commission on [ ], 2002 (the "Notification of Registration"); the Fund's
Registration Statement on Form 8-A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as filed with the Commission on [ ], 2002 (the
"Exchange Act Registration Statement"); the Fund's Agreement and Declaration of
Trust, as amended to the date hereof (the "Declaration of Trust"), on file in
the offices of the Secretary of State of The Commonwealth of Massachusetts and
the Clerk of the City of Boston; the By-laws of the Fund, as amended to the date
hereof (the "By-laws"); a copy of the Prospectus dated [ ], 2002, relating to
the Shares and the Statement of Additional Information of the Fund dated [ ],
2002, each as filed with the Commission pursuant to Rule 497 under the
Securities Act on [ ], 2002 (together, the "Prospectus"); the Investment
Management Agreement dated as of [ ], 2002, between the Fund and the
Investment Manager (the "Investment Management Agreement"); the Portfolio
Management Agreement dated as of [ ], 2002, between Pacific Investment
Management Company LLC (the "Portfolio Manager") and the Investment Manager (the
"Portfolio Management Agreement"); the Custodian Agreement dated as of [ ],
2002, between the Fund and State Street Bank and Trust Company (the "Custodian
Agreement") and the Transfer Agency Services Agreement dated as of [ ], 2002,
between the Fund and PFPC Inc. (the "Transfer Agency Agreement," and together
with the Custodian Agreement, the "Fund Agreements"); the Terms and Conditions
of the Fund's Dividend Reinvestment Plan; and the Underwriting Agreement.
Additionally, we have relied upon the oral representation of Mr. Xxxxx X'Xxxxxx
of the Commission staff to the effect that the Registration Statement and the
Exchange Act Registration Statement became effective as of [___ a.m./p.m.] on [
], 2002; a letter dated [ ], 2002, from Xx. Xxxxxxxxx Xxxxxx, Executive Vice
President of the New York Stock Exchange, authorizing the Shares for listing on
such Exchange; and the oral representation by the [ ] of the Commission
[staff] that as of [ ] [a.m.], no stop order suspending the effectiveness of
the Registration Statement had been issued and no proceeding for any such
purpose was pending or threatened.
We have also examined and relied upon the original or copies of minutes
of the meetings or written consents of the sole shareholder and the Board of
Trustees of the Fund, the documents delivered to the Underwriters by the Fund
and the Investment Manager dated as of the date hereof pursuant to the
Underwriting Agreement and such other documents, including certificates of
officers of the Fund and certificates of the
B-2
Secretary of State of the State of New York as to the qualification and good
standing of the Fund as a foreign entity in New York and the Secretary of State
of the State of California as to the qualification and good standing of the Fund
as a foreign entity in California, as we have deemed necessary for purposes of
rendering our opinions below. We have assumed the genuineness of the signatures
on all documents examined by us, the authenticity of all documents submitted to
us as originals and the conformity to the corresponding originals of all
documents submitted to us as copies.
We express no opinion as to the laws of any jurisdiction other than The
Commonwealth of Massachusetts and the United States of America. We call your
attention to the fact that the Underwriting Agreement provides that it is to be
governed by and construed in accordance with the laws of the State of New York
and the Transfer Agency Agreement provides that it is to be governed by and
construed in accordance with the laws of the State of Delaware, and to the fact
that the Investment Management Agreement does not provide that it is to be
governed by the laws of any particular jurisdiction. In rendering the opinion as
to enforceability expressed in paragraph [5] below, we have limited the scope of
our opinion to the conclusions that would be reached by a Massachusetts court
that had determined that each of the Underwriting Agreement, the Investment
Management Agreement and the Fund Agreements would be governed by, and construed
in accordance with, the internal laws of The Commonwealth of Massachusetts.
Further, we express no opinion as to the state securities or Blue Sky laws of
any jurisdiction, including The Commonwealth of Massachusetts.
For purposes of our opinion set forth in paragraph [2] below with
respect to the power and authority of the Fund to own, lease and operate its
properties and conduct its business, we have relied upon certificates of
officers of the Fund as to the states in which the Fund leases or owns real
property or in which it conducts material operations.
Insofar as this opinion relates to factual matters, we have made
inquiries to officers of the Fund, the Investment Manager and the Portfolio
Manager to the extent we believe reasonable with respect to such matters and
have relied upon representations made by the Fund and the Investment Manager in
the Underwriting Agreement, representations made by the Portfolio Manager to the
Investment Manager and representations made to us by one or more officers of the
Fund, the Investment Manager or the Portfolio Manager. We have not independently
verified the accuracy of such representations. In respect of our opinions set
forth in paragraphs [7], [9] and [11] below, we have not searched the dockets of
any court, administrative body or other filing office in any jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Registration Statement and all post-effective amendments on
or before the Closing Date, if any, are effective under the Securities Act; the
filing of the Prospectus pursuant to Rule 497 under the Securities Act has been
made in the manner and within the time period required by Rule 497; and based
upon oral inquiries to the
B-3
Commission staff on [ ], 2002, and on this date, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for any such purpose is pending or threatened by the Commission.
2. The Fund has been duly organized and is validly existing and in
good standing as an unincorporated voluntary association under and by virtue of
the laws of The Commonwealth of Massachusetts and has full power and authority
to own or lease its properties and to conduct its business as described in the
Registration Statement and the Prospectus. The Fund is duly qualified to do
business and is in good standing as a foreign [entity] in New York and
California.
3. The Fund's authorized capitalization is as set forth in the
Registration Statement and the Prospectus. The Fund has an indefinite number of
authorized common shares of beneficial interest, par value $0.00001 per share.
The Shares conform in all material respects as to legal matters to the
description of them under the captions "Description of shares" in the
Prospectus. All outstanding common shares of beneficial interest of the Fund
have been duly authorized and are validly issued, fully paid and, subject to the
penultimate paragraph below, non-assessable. The Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and, subject to the penultimate paragraph below,
non-assessable. Except as contemplated by the Underwriting Agreement, no person
is entitled to any preemptive or other similar rights with respect to the
Shares.
4. To the best of our knowledge after due inquiry, including oral
inquiries of the Commission staff on [ ], 2002, the Fund is duly registered
with the Commission under the Investment Company Act as a closed-end management
investment company, and all required action has been taken by the Fund under the
Securities Act, the Investment Company Act and the rules and regulations
thereunder in connection with the issuance and sale of the Shares to make the
public offering and consummate the sale of the Shares pursuant to the
Underwriting Agreement.
5. The Fund has full power and authority to enter into each of the
Fund Agreements and to perform all of the terms and provisions thereof to be
carried out by it. Each Fund Agreement has been duly and validly authorized,
executed and delivered by the Fund. Each Fund Agreement complies in all material
respects with all applicable provisions of the Investment Company Act and the
Investment Advisers Act of 1940, as amended, as the case may be. 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, subject as to enforcement to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
6. The Fund has full power and authority to enter into each of the
Investment Management Agreement and the Underwriting Agreement and to perform
all of the terms and provisions thereof to be carried out by it. The Investment
Management Agreement
B-4
and the Underwriting Agreement have been duly and validly authorized, executed
and delivered by the Fund.
7. None of (a) the execution and delivery by the Fund of the
Investment Management Agreement, the Underwriting Agreement or any 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 Investment Management Agreement, the Underwriting
Agreement or any of the Fund Agreements or consummation by the Fund of the other
transactions contemplated by the Investment Management Agreement, the
Underwriting Agreement or any of the Fund Agreements conflicts or will conflict
with, or results or will result in a breach of, the Declaration of Trust or the
By-laws or, to our knowledge, any agreement or instrument to which the Fund is a
party or by which the Fund is bound, or violates or will violate any federal
statute, law or regulation or any judgment, injunction, order or decree of any
federal governmental agency or body that is applicable to the Fund and that is
known to us, which violation would have a material adverse effect on the
condition or business of the Fund.
8. To the best of our knowledge, the Fund is not currently in breach
of, or in default under, any material written agreement or instrument to which
it is a party or by which it or its property is bound or affected.
9. No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or securities association is
required by the Fund for the consummation by the Fund of the transactions
contemplated in the Investment Management Agreement, the Underwriting Agreement
and the Fund Agreements, except such as (a) have been obtained under the
Securities Act, the Investment Company Act or the Exchange Act and (b) may be
required by the New York Stock Exchange or the National Association of
Securities Dealers, Inc. 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.
10. To the best of our knowledge after due inquiry, including oral
inquiries of an employee of the New York Stock Exchange on [ ], 2002, the
Shares have been authorized for listing on the New York Stock Exchange, subject
to official notice of issuance, and to the best of our knowledge after due
inquiry, including oral inquiries of the Commission staff on [ ], 2002, the
Exchange Act Registration Statement has become effective.
11. To our knowledge, there are no legal or governmental proceedings
pending or threatened against the Fund, or to which the Fund or any of its
properties is subject, that are required to be described in the Registration
Statement or the Prospectus but are not described therein as required.
12. To the best of our knowledge after due inquiry, there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration
B-5
Statement which have not been so described or filed as an exhibit or
incorporated therein by reference.
13. Each of the sections in the Prospectus entitled "Tax matters," to
the extent that it states matters of United States law or legal conclusions with
respect thereto, presents a fair summary of the principal federal income tax
rules currently in effect applicable to the Fund and to the purchase, ownership
and disposition of the Shares.
14. The Registration Statement (except for the financial statements
and schedules, the notes thereto and any schedules and other financial data
contained or incorporated by reference therein or omitted therefrom, as to which
we express no opinion), 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 applicable requirements of the Securities Act and the
Investment Company Act.
We have not independently verified the accuracy, completeness or
fairness of the statements made or the information contained in the Registration
Statement or the Prospectus and, except in the respects and to the extent set
forth in paragraphs [3] and [14] above, we are not passing upon and do not
assume any responsibility therefor. In the course of the preparation by the Fund
of the Registration Statement and the Prospectus, we have participated in
discussions with your representatives and employees and officers of the Fund,
the Investment Manager and the Portfolio Manager and in discussions with the
Fund's independent accountants, in which the business and the affairs of the
Fund, the Investment Manager and the Portfolio Manager and the contents of the
Registration Statement and the Prospectus were discussed. There is no assurance
that all material facts as to the Fund, the Investment Manager, the Portfolio
Manager and their affairs were disclosed to us or that our familiarity with the
Fund and the Investment Manager or any familiarity with the Portfolio Manager is
such that we have necessarily recognized the materiality of such facts as were
disclosed to us, and we have to a large extent relied upon statement of
representatives of the Fund, the Investment Manager and the Portfolio Manager as
to the materiality of the facts disclosed to us. On the basis of information
that we have gained in the course of our representation of the Fund in
connections with its preparation of the Registration Statement and the
Prospectus and our participation in the discussions referred to above, no facts
have come to our attention that would lead us to believe that as of [ ], 2002,
the Registration Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that as of the date of
the Prospectus and the date hereof the Prospectus contained an untrue statement
of material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light, in each case, of
the circumstances under which they were made, not misleading (in each case,
other than the financial statements and schedules, the notes thereto and any
schedules and other financial data contained or incorporated by reference
therein or omitted therefrom, as to which we express no opinion).
B-6
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Fund's Declaration of Trust disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, and instrument entered into or executed by
the Fund or the Trustees. The Declaration of Trust provides for indemnification
out of the property of the Fund for all loss and expense of any shareholder held
personally liable solely by reason of being or having been a shareholder of the
Fund. Thus, the risk of a shareholder's incurring financial loss on account of
being a shareholder is limited to circumstances in which the Fund itself would
be unable to meet its obligations.
This letter and the opinions expressed herein are furnished by us to
you and are solely for benefit of the Underwriters, except that Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois) may rely on this letter as to all matters
governed by the laws of The Commonwealth of Massachusetts in delivering its
opinion to you on the date hereof.
Very truly yours,
Ropes & Xxxx
B-7
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING PIMCO FUNDS ADVISORS LLC
October [ ], 2002
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
RBC Xxxx Xxxxxxxx Incorporated
Wachovia Securities, Inc.
Advest, Inc.
Xxxxxxxxxx & Co. Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Quick & Xxxxxx, Inc.
UBS Warburg LLC
as Managing Underwriter
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: PIMCO Funds Advisors LLC
Ladies and Gentlemen:
I am the General Counsel of PIMCO Funds Advisors LLC, a
Delaware limited liability company (the name of which entity is expected to be
changed to "PIMCO Advisors Fund Management LLC," effective October 31, 2002)
("PIMCO Funds Advisors"), and have counseled PIMCO Funds Advisors in such
capacity in connection with the sale to you by PIMCO New York Municipal Income
Fund III, 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"), of an
aggregate of [____] common shares of beneficial interest, of the Fund, pursuant
to a registration statement on Form N-2 under the Securities Act of 1933, as
amended (the "Act") and the Investment Company Act of 1940, as amended (the
"Investment Company Act"), filed with the Securities and Exchange Commission
(the "Commission") on [ ], 2002 (Securities Act File No. 333-[ ], and
Investment Company Act File No. 811-[ ]), as amended by Amendment No. 1 filed
with the Commission on [ ], 2002, Amendment No. 2 filed with the Commission
on June __, 2002 and Amendment No. 3 filed with the Commission on [ ], 2002
[, and a registration statement on Form N-2 under the Act and the Investment
Company Act, filed with the Commission on [ ], 2002 pursuant to Rule 462(b)
under the Act ([such registration statements collectively referred to herein as]
the "Registration Statement"), and an underwriting agreement dated [ ], 2002
by and among you, the Fund and PIMCO Funds Advisors (the "Underwriting
Agreement").
C-1
This opinion is rendered to you pursuant to Section 6(e) of
the Underwriting Agreement. Capitalized terms used herein without definition
have the meanings assigned to them in the Underwriting Agreement.
As such counsel, I have examined such matters of fact and
questions of law as I have considered appropriate for purposes of rendering the
opinions expressed below, except where a statement is qualified as to knowledge
or awareness, in which case I have made no or limited inquiry as specified
below. I have examined, among other things, the following:
(a) the Underwriting Agreement;
(b) that certain Investment Management Agreement by and
between the Fund and the PIMCO Funds Advisors, dated
as of [___], 2002;
(c) that certain Portfolio Management Agreement by and
among Pacific Investment Management Company LLC and
PIMCO Funds Advisors, as accepted and agreed to by
the Fund, dated as of [___], 2002; and
(d) that certain Shareholder Servicing Agreement by and
between PIMCO Funds Advisors and UBS Warburg LLC,
dated as of October 31, 2002.
The documents described in subsection (a)-(d) above are
referred to herein collectively as the "Transaction Documents."
In my examination, I have assumed the genuineness of all
signatures (other than those of officers of PIMCO Funds Advisors on the
Transaction Documents), the authenticity of all documents submitted to me as
originals, and the conformity to authentic original documents of all documents
submitted to me as copies.
I have been furnished with, and with your consent have relied
upon, certificates of officers of PIMCO Funds Advisors with respect to certain
factual matters. In addition, I have obtained and relied upon such certificates
and assurances from public officials as I have deemed necessary.
I am opining herein as to the effect of the federal laws of
the United States, the internal laws of the State of New York and the internal
laws of the State of Delaware, and I express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or country or as to any matters of municipal law or the laws of any
other local agencies within any state or country. My opinions set forth in
paragraph 3 below are based upon my consideration of only those statutes, rules
and regulations which, in my experience, are normally applicable to transactions
similar to those contemplated by the Transaction Documents, generally.
Whenever a statement herein is qualified by "to my knowledge"
or a similar phrase, it is intended to indicate that I do not have current
actual knowledge of the
C-2
inaccuracy of such statement. However, except as otherwise expressly indicated,
I have not undertaken any independent investigation to determine the accuracy of
any such statement, and no inference that I have any knowledge of any matters
pertaining to such statement should be drawn from my position as General Counsel
of PIMCO Funds Advisors.
Subject to the foregoing and the other matters set forth
herein, it is my opinion that, as of the date hereof:
1. PIMCO Funds Advisors is a limited liability company and
is validly existing and in good standing under the Delaware Limited Liability
Company Act (6 Del. C (S). 18-101, et seq.) with all necessary power and
authority to enter into and deliver the Transaction Documents and perform its
obligations thereunder and to carry on its business as it is now being conducted
and as described in the Registration Statement. Based solely on certificates
from public officials, I confirm that PIMCO Funds Advisors is qualified to do
business in the following States: California, New York, Connecticut, Texas and
Washington, such States being those jurisdictions in which its ownership or
leasing of property or its conducting of business requires such qualification
and where failure to so qualify would have a material adverse effect on the
ability of the Investment Manager to perform its obligations under the
Investment Management Agreement and the Portfolio Management Agreement.
2. The execution, delivery and performance of the
Transaction Documents by PIMCO Funds Advisors have been duly authorized by all
necessary action of PIMCO Funds Advisors and no other actions on the part of
PIMCO Funds Advisors or its unitholders or any subsidiary of PIMCO Funds
Advisors or its unitholders is necessary to authorize and consummate the
transactions contemplated thereby, and the Transaction Documents have been duly
executed and delivered by PIMCO Funds Advisors.
3. Each of the Investment Management Agreement, the
Portfolio Management Agreement and the Shareholder Servicing Agreement
constitutes a legally valid and binding agreement of PIMCO Funds Advisors,
enforceable against PIMCO Funds Advisors in accordance with its terms.
4. Neither the execution and delivery of the Transaction
Documents by PIMCO Funds Advisors, nor the consummation by PIMCO Funds Advisors
of transactions contemplated thereby, nor compliance by PIMCO Funds Advisors
with any of the terms and provisions thereof will:
(i) violate any provision of the Second Amended and
Restated Agreement of Limited Liability Company Agreement of PIMCO
Funds Advisors LLC, effective [ ],
(ii) violate any federal, California or New York
statute, rule or regulation applicable to PIMCO Funds Advisors (other
than federal and state securities or blue sky laws, the Investment
Company Act of 1940, as amended,
C-3
and the Investment Advisers Act of 1940, as amended, as to which I
express no opinion),
(iii) violate any agreement to which PIMCO Funds
Advisors is a party or by which it is bound and which is material to
PIMCO Funds Advisors' businesses taken as a whole (the "Material
Agreements"),
(iv) violate any order, writ, injunction or decree,
known to me and applicable to PIMCO Funds Advisors, or
(v) to the best of my knowledge, require any consents,
approvals, authorizations, registrations, declarations or filings by
PIMCO Funds Advisors under any federal statute, rule or regulation
applicable to PIMCO Funds Advisors, except as have been obtained under
the Act, the Investment Company Act or the Investment Advisers Act of
1940.
No opinion is expressed in this paragraph 4 as to the
application of Section 548 of the federal Bankruptcy Code and comparable
provisions of state or foreign law or of any antifraud laws, antitrust or trade
regulation laws. No opinion is expressed in this paragraph 4 with respect to the
operating licenses necessary for PIMCO Funds Advisors' businesses.
5. PIMCO Funds 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.
6. The description of PIMCO Funds Advisors and its business,
and the statements attributable to PIMCO Funds Advisors, set forth in the
Registration Statement and the Prospectus under the headings "Prospectus Summary
- Investment Manager" and "Management of the Fund" do not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
7. There is no action, suit or proceeding before or by any
court, commission, regulatory body, administrative agency or other governmental
agency or body, foreign or domestic, now pending or, to my knowledge, threatened
against PIMCO Funds Advisors of a nature required to be disclosed in the
Registration Statement or Prospectus or the ability of PIMCO Funds Advisors to
fulfill its obligations under the Investment Management Agreement or the
Portfolio Management Agreement.
The opinions expressed in paragraph 3 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights or remedies of creditors generally;
C-4
(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought;
(c) the unenforceability under certain circumstances under law
or court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy; and
(d) the unenforceability of any provision requiring the
payment of attorney's fees, except to the extent that a court determines such
fees to be reasonable.
In rendering the opinions expressed in paragraph 4 insofar as
they require interpretation of the Material Agreements (i) I have assumed with
your permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the internal laws
of any other state and (ii) to the extent that any questions of legality or
legal construction have arisen in connection with my review, I have applied the
laws of the State of New York in resolving such questions. I advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.
To the extent that the obligations of PIMCO Funds Advisors may
be dependent upon such matters, I assume for purposes of this opinion that: (i)
all parties to the Transaction Documents other than PIMCO Funds Advisors are
duly incorporated or organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation or organization; (ii)
all parties to the Transaction Documents other than PIMCO Funds Advisors have
the requisite power and authority and, in the case of natural persons, legal
capacity to execute and deliver the Transaction Documents and to perform their
respective obligations under the Transaction Documents to which they are a
party; and (iii) the Transaction Documents to which such parties other than
PIMCO Funds Advisors are a party have been duly authorized, executed and
delivered by such parties and, other than PIMCO Funds Advisors, constitute their
legally valid and binding obligations, enforceable against them in accordance
with their terms. I express no opinion as to compliance by any parties to the
Transaction Documents with any state or federal laws or regulations applicable
to the subject transactions because of the nature of their business and I
express no opinion as to compliance by any parties to the Transaction Documents
with any foreign laws or regulations applicable to the transactions contemplated
by the Transaction Documents or which may affect the Transaction Documents'
enforceability.
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may not
be relied upon by
C-5
you for any other purpose, or furnished to, quoted to or relied upon by any
other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
* * *
Special Counsel for the Investment Adviser shall separately opine that, assuming
the Investment Manager 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 Management Agreement, the Registration Statement and the Prospectus,
neither the execution and delivery of the Underwriting Agreement, the Investment
Management Agreement, the Shareholder Servicing Agreement or the Portfolio
Management Agreement by the Investment Manager, nor the consummation by the
Investment Manager of the transactions contemplated thereby, nor compliance by
the Investment Manager with any of the terms and provisions thereof will violate
the provisions of the Investment Company Act or the Advisers Act; provided,
however, that such opinion may specifically disclaim any opinion as to (a) the
reasonableness of the fees to be paid to the Investment Manager under the
Investment Management Agreement and (b) the compliance by the Investment Manager
with its indemnification and contribution obligations set forth in the
Underwriting Agreement.
C-6
SCHEDULE D
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING PIMCO
October [ ], 2002
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
RBC Xxxx Xxxxxxxx Incorporated
Wachovia Securities, Inc.
Advest, Inc.
Xxxxxxxxxx & Co. Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Quick & Xxxxxx, Inc.
UBS Warburg LLC
as Managing Underwriter
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Pacific Investment Management Company LLC
Ladies and Gentlemen:
I am the General Counsel of PIMCO Funds Advisors LLC, a
Delaware limited liability company (the name of which entity is expected to be
changed to "PIMCO Advisors Fund Management LLC," effective October 31, 2002)
("PIMCO Funds Advisors"). PIMCO Funds Advisors is a wholly-owned subsidiary of
PIMCO Advisory Services Holdings LLC, which is a wholly-owned subsidiary of
Allianz Dresdner Asset Management of America L.P. ("XXXX"). Pacific Investment
Management Company LLC, a Delaware limited liability company ("PIMCO") is a
subsidiary partnership of XXXX. I have counseled PIMCO and PIMCO Funds Advisors
in connection with the sale to you by PIMCO New York Municipal Income Fund III,
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"), of an aggregate of
[_____] common shares of beneficial interest, of the Fund, pursuant to a
registration statement on Form N-2 under the Securities Act of 1933, as amended
(the "Act") and the Investment Company Act of 1940, as amended (the "Investment
Company Act"), filed with the Securities and Exchange Commission (the
"Commission") on [ ], 2002 (Act File No. 333-[ ], and Investment Company
Act File No. 811-[ ]), as amended by Amendment No. 1 filed with the Commission
on [ ], 2002, Amendment No. 2 filed with the Commission on [ ], 2002 and
Amendment No. 3 filed with the Commission on [
D-1
], 2002 [, and a registration statement on Form N-2 under the Act and the
Investment Company Act, filed with the Commission on [ ], 2002 pursuant to
Rule 462(b) under the Act ([such registration statements collectively referred
to herein as] the "Registration Statement"), and an underwriting agreement dated
[ ], 2002 by and among you, the Fund and PIMCO Funds Advisors (the
"Underwriting Agreement").
This opinion is rendered to you pursuant to Section 6(e) of
the Underwriting Agreement. Capitalized terms used herein without definition
have the meanings assigned to them in the Underwriting Agreement.
As such counsel, I have examined such matters of fact and questions of
law as I have considered appropriate for purposes of rendering the opinions
expressed below, except where a statement is qualified as to knowledge or
awareness, in which case I have made no or limited inquiry as specified below. I
have examined, among other things, that certain Portfolio Management Agreement
by and between PIMCO and the PIMCO Funds Advisors LLC, as accepted and agreed to
by the Fund, dated as of [ ], 2002 (the "Portfolio Management Agreement").
In my examination, I have assumed the genuineness of all
signatures (other than those of officers of PIMCO on the Portfolio Management
Agreement), the authenticity of all documents submitted to me as originals, and
the conformity to authentic original documents of all documents submitted to me
as copies.
I have been furnished with, and with your consent have relied
upon, certificates of officers of PIMCO with respect to certain factual matters.
In addition, I have obtained and relied upon such certificates and assurances
from public officials as I have deemed necessary.
I am opining herein as to the effect of the federal laws of
the United States, the internal laws of the State of New York and the internal
laws of the State of Delaware, and I express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or country or as to any matters of municipal law or the laws of any
other local agencies within any state or country. My opinions set forth in
paragraph 3 below are based upon my consideration of only those statutes, rules
and regulations which, in my experience, are normally applicable to transactions
similar to those contemplated by the Portfolio Management Agreement, generally.
Whenever a statement herein is qualified by "to my knowledge"
or a similar phrase, it is intended to indicate that I do not have current
actual knowledge of the inaccuracy of such statement. However, except as
otherwise expressly indicated, I have not undertaken any independent
investigation to determine the accuracy of any such statement, and no inference
that I have any knowledge of any matters pertaining to such statement should be
drawn from my position as General Counsel of PIMCO Funds Advisors.
Subject to the foregoing and the other matters set forth
herein, it is my opinion that, as of the date hereof:
D-2
1. PIMCO is a limited liability company and is validly
existing and in good standing under the Delaware Limited Liability Company Act
(6 Del. C (S) 18-101, et seq.) with all necessary partnership power and
authority to enter into and deliver the Portfolio Management Agreement and
perform its obligations thereunder and to carry on its business as it is now
being conducted and as described in the Registration Statement. Based solely on
certificates from public officials, I confirm that PIMCO is qualified to do
business in the following States: ______________, such States being those
jurisdictions in which its ownership or leasing of property or its conducting of
business requires such qualification and where failure to so qualify would have
a material adverse effect on the ability of the Investment Manager to perform
its obligations under the Investment Management Agreement and the Portfolio
Management Agreement.
2. The execution, delivery and performance of the Portfolio
Management Agreement by PIMCO have been duly authorized by all necessary
partnership action of PIMCO and no other actions on the part of PIMCO or its
unitholders or any subsidiary of PIMCO or its unitholders is necessary to
authorize and consummate the transactions contemplated thereby, and the
Portfolio Management Agreement has been duly executed and delivered by PIMCO.
3. The Portfolio Management Agreement constitutes a legally
valid and binding agreement of PIMCO , enforceable against PIMCO in accordance
with its terms.
4. Neither the execution and delivery of the Portfolio
Management Agreement by PIMCO , nor the consummation by PIMCO of transactions
contemplated thereby, nor compliance by PIMCO with any of the terms and
provisions thereof will:
(i) violate any provision of the [Limited Liability
Company Agreement] of PIMCO, effective [ ],
(ii) violate any federal, California or New York
statute, rule or regulation applicable to PIMCO (other than federal and
state securities or blue sky laws, the Investment Company Act of 1940,
as amended, and the Investment Advisers Act of 1940, as amended, as to
which I express no opinion),
(iii) violate any agreement to which PIMCO is a party or
by which it is bound and which is material to PIMCO's businesses taken
as a whole (the "Material Agreements"),
(iv) violate any order, writ, injunction or decree,
known to me and applicable to PIMCO , or
(v) to the best of my knowledge, require any consents,
approvals, authorizations, registrations, declarations or filings by
PIMCO under any federal statute, rule or regulation applicable to PIMCO
, except as have been obtained under the Act, the Investment Company
Act or the Investment Advisers Act of 1940.
D-3
No opinion is expressed in this paragraph 4 as to the
application of Section 548 of the federal Bankruptcy Code and comparable
provisions of state or foreign law or of any antifraud laws, antitrust or trade
regulation laws. No opinion is expressed in this paragraph 4 with respect to the
operating licenses necessary for PIMCO's businesses.
5. 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.
6. The description of PIMCO and its business, and the
statements attributable to PIMCO, set forth in the Registration Statement and
the Prospectus under the headings "Prospectus Summary - Portfolio Manager" and
"Management of the Fund" do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
7. There is no action, suit or proceeding before or by any
court, commission, regulatory body, administrative agency or other governmental
agency or body, foreign or domestic, now pending or, to my knowledge, threatened
against PIMCO of a nature required to be disclosed in the Registration Statement
or Prospectus or the ability of PIMCO to fulfill its obligations under the
Portfolio Management Agreement.
The opinions expressed in paragraph 3 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights or remedies of creditors generally;
(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought;
(c) the unenforceability under certain circumstances under law
or court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy; and
(d) the unenforceability of any provision requiring the
payment of attorney's fees, except to the extent that a court determines such
fees to be reasonable.
In rendering the opinions expressed in paragraph 4 insofar as
they require interpretation of the Material Agreements (i) I have assumed with
your permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in
D-4
application of the internal laws of any other state and (ii) to the extent that
any questions of legality or legal construction have arisen in connection with
my review, I have applied the laws of the State of New York in resolving such
questions. I advise you that certain of the Material Agreements may be governed
by other laws, that such laws may vary substantially from the law assumed to
govern for purposes of this opinion, and that this opinion may not be relied
upon as to whether or not a breach or default would occur under the law actually
governing such Material Agreements.
To the extent that the obligations of PIMCO may be dependent
upon such matters, I assume for purposes of this opinion that: (i) all parties
to the Portfolio Management Agreement other than PIMCO are duly incorporated or
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization; (ii) all parties to
the Portfolio Management Agreement other than PIMCO have the requisite power and
authority and, in the case of natural persons, legal capacity to execute and
deliver the Portfolio Management Agreement and to perform their respective
obligations under the Portfolio Management Agreement to which they are a party;
and (iii) the Portfolio Management Agreement has been duly authorized, executed
and delivered by such parties other than PIMCO and, other than PIMCO, constitute
their legally valid and binding obligations, enforceable against them in
accordance with their terms. I express no opinion as to compliance by any
parties to the Portfolio Management Agreement with any state or federal laws or
regulations applicable to the subject transactions because of the nature of
their business and I express no opinion as to compliance by any parties to the
Portfolio Management Agreement with any foreign laws or regulations applicable
to the transactions contemplated by the Portfolio Management Agreement or which
may affect the Portfolio Management Agreement's enforceability.
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may not
be relied upon by you for any other purpose, or furnished to, quoted to or
relied upon by any other person, firm or corporation for any purpose, without my
prior written consent.
Very truly yours,
D-5
SCHEDULE E
FORM OF [LOCAL COUNSEL] OPINION
October [ ], 2002
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
RBC Xxxx Xxxxxxxx Incorporated
Wachovia Securities, Inc.
Advest, Inc.
Xxxxxxxxxx & Co. Inc.
H&R Block Financial Advisors, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Quick & Xxxxxx, Inc.
UBS Warburg LLC
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: PIMCO New York Municipal Income Fund III
Registration Statement on Form N-2
Ladies and Gentlemen:
We have acted as special New York counsel to the PIMCO New
York Municipal Income Fund III, a Massachusetts business trust (the "Fund"), in
connection with the Fund's sale to you of an aggregate of [ ] common shares of
beneficial interest of the Fund, pursuant to a registration statement on Form
N-2 under the Securities Act of 1933, as amended (the "Act") and the Investment
Company Act of 1940, as amended (the "Investment Company Act"), filed with the
Securities and Exchange Commission (the "Commission") on [ ], 2002 (Act File
No. 333-[ ], and Investment Company Act File No. 811-[ ]), as amended by
Amendment No. 1 filed with the Commission on [ ], 2002 (the "Registration
Statement"), and an underwriting agreement dated October [ ], 2002 by and
between you, the Fund, PIMCO Funds Advisors and Pacific Investment Management
Company LLC (the "Underwriting Agreement").
This opinion is rendered to you pursuant to Section 6(e) of
the Underwriting Agreement. Capitalized terms used herein without definition
have the meanings assigned to them in the Underwriting Agreement.
E-1
In our capacity as special New York counsel to the Fund, we
have relied as to matters of fact, to the extent we deem proper, on statements
contained in the Registration Statement, Prospectus and Statement of Additional
Information and on publicly available sources of information published by the
State of New York. In addition, we have made such legal and factual examinations
and inquiries, including an examination of originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for purposes of
this opinion. For purposes of our opinion, we have not conducted an independent
investigation or audit of the facts set forth in the foregoing certificates or
documents. In our examination, we have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures thereon, the
legal capacity of natural persons executing such documents and the conformity to
authentic original documents of all documents submitted to us as copies.
No opinion is expressed as to any matter not discussed herein.
We are opining herein only as to the effect of the New York tax laws, and we
express no opinion with respect to the applicability or effect of federal laws,
other New York laws, the laws of any other state or jurisdiction or as to any
matters of municipal law or the laws of any other local agencies within any
state.
Based upon such facts, assumptions and representations,
including the facts set forth in the Registration Statement, Prospectus, and
Statement of Additional Information, the statements contained in the Prospectus
under the heading "Tax Matters -New York Tax Matters" and in Appendix B to the
Statement of Additional Information under the heading "Factors Pertaining to New
York - New York Tax Matters," to the extent that such statements constitute
matters of law or legal conclusions, are correct in all material respects. This
opinion is based on current New York tax laws and interpretations thereof by
courts having jurisdiction over such matters, both of which are subject to
change either prospectively or retroactively.
Although we do not pass upon or assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, and have not made any independent
check or verification thereof, no facts have come to our attention which would
lead us to believe that the material contained in the Prospectus under the
heading "Tax Matters - New York Tax Matters" and in Appendix B to the Statement
of Additional Information under the heading "Factors Pertaining to New York," at
the time the Registration Statement 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.
E-2
This opinion is rendered to you as of the date of this letter,
and we undertake no obligation to update this information subsequent to the date
hereof. Any variation or difference in the facts from those set forth in the
representations described above, including in the Registration Statement,
Prospectus and Statement of Additional Information, may affect the conclusions
stated herein.
This opinion is rendered to you and is for your benefit in
connection with the filing of the Registration Statement with the Commission.
This opinion may not be relied upon by you for any other purpose, or furnished
to, quoted to or relied upon by any other person, firm or corporation for any
purpose, without prior written consent.
Very truly yours,
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SCHEDULE F
FORM OF ACCOUNTANT'S LETTER
October [ ], 2002
The Board of Trustees of
PIMCO New York Municipal Income Fund III
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 New York Municipal Income Fund III (the "Fund") as of [ ], 2002 included
in the Registration Statement on Form N-2 filed by the Fund under the Securities
Act of 1933 (the "Act") (File No. 333-[ ]) and under the Investment Company
Act of 1940 (the "1940 Act") (File No. 811-[ ]); such statement and our
report with respect to such statement are included in the Registration
Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the
Fund within the meaning of the Act and the applicable rules and
regulations thereunder.
2. In our opinion, the statement of assets and liabilities
included in the Registration Statement and audited by us complies as to
form in all respects with the applicable accounting requirements of the
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 [ ], 2002, were set
forth therein.
4. Fund officials have advised us that no financial statements
as of any date subsequent to [ ], 2002, are available. We have made
inquiries of certain officials of the Fund who have - responsibility
for financial and accounting matters
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regarding whether there was any change at [ ], 2002, in the capital
shares or net assets of the Fund as compared with amounts shown in the
[ ], 2002, 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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