Exhibit h.1
PIMCO Corporate Opportunity Fund
(a Massachusetts business trust)
4,520 Auction Market Preferred Shares ("AMPS") of Beneficial Interest Series M
4,520 Auction Market Preferred Shares ("AMPS") of Beneficial Interest Series T
4,520 Auction Market Preferred Shares ("AMPS") of Beneficial Interest Series W
4,520 Auction Market Preferred Shares ("AMPS") of Beneficial Interest Series TH
4,520 Auction Market Preferred Shares ("AMPS") of Beneficial Interest Series F
Liquidation Preference $25,000 per share
FORM OF PURCHASE AGREEMENT
February 21, 2003
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
X.X. Xxxxxxx & Sons, Inc.
UBS Warburg LLC
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
PIMCO Corporate Opportunity Fund, a Massachusetts business trust (the
"Fund"), proposes, upon the terms and conditions set forth herein, to issue and
sell an aggregate of 4,520 Shares of its Auction Market Preferred Shares,
Series M, 4,520 Shares of its Auction Market Preferred Shares, Series T, 4,520
Shares of its Auction Market Preferred Shares, Series W, 4,520 Shares of its
Auction Market Preferred Shares, Series TH and 4,520 Shares of its Auction
Market Preferred Shares, Series F (the "AMPS"). The AMPS will be authorized by,
and subject to the terms and conditions of, the Second Amended and Restated
By-laws of the Fund (the "By-laws") and the Amended and Restated Agreement and
Declaration of Trust of the Fund, as amended through February 21, 2003 (the
"Declaration"), substantially in the forms filed as exhibits to the Registration
Statement referred to in the second following paragraph of this Agreement, as
the same may be amended from time to time. The Fund and the Fund's investment
adviser, PIMCO Advisors Fund Management LLC, a Delaware limited liability
company, (the "Investment Adviser and, together with Pacific Investment
Management Company, LLC, a Delaware limited liability company ("PIMCO"), the
"Advisers"), each confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (together "Xxxxxxx Xxxxx") and each
of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
provided in Section 10 hereof), for whom Xxxxxxx Xxxxx is acting as
representative (in such capacity, the "Representative"), with respect to the
issue and sale by the Fund and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of AMPS set forth in said
Schedule A.
The Fund understands that the Underwriters propose to make a public
offering of the AMPS as soon as the Representative deems advisable after this
Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-102464 and No.
811-21238) covering the registration of the AMPS under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses, which registration statement also constitutes an amendment to
the Fund's registration statement under the Investment Company Act of 1940, as
amended (the "1940 Act"). Promptly after execution and delivery of this
Agreement, the Fund will, to the extent that it has not already don so, either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
and the 1940 Act (the "Rules and Regulations") and paragraph (c) or (h) of Rule
497 ("Rule 497") of the Rules and Regulations or (ii) if the Fund has elected to
rely upon Rule 434 ("Rule 434") of the Rules and Regulations, prepare and file a
term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and
Rule 497. The information included in any such prospectus or in any such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective, if applicable, (a) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each prospectus used before such registration statement became effective, and
any prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, including in each case any statement
of additional information incorporated therein by reference, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
and schedules thereto at the time it became effective and including the Rule
430A Information and the Rule 434 Information, as applicable, is herein called
the "Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the Rules and Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form first furnished to the Underwriters for use in connection with the
offering of the AMPS, including the statement of additional information
incorporated therein by reference, is herein called the "Prospectus." If Rule
434 is relied on, the term "Prospectus" shall refer to the preliminary
prospectus dated February 14, 2003 together with the Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which are "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference into the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference into the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Investment Adviser.
The Fund and the Investment Adviser jointly and severally represent and warrant
to each Underwriter as of the date hereof, and as of the Closing Time referred
to in Section 2(c) hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop
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order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act, or
order of suspension or revocation of registration pursuant to Section 8(e)
of the 1940 Act, and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of the Fund or the
Investment Adviser, are contemplated by the Commission, and any request on
the part of the Commission for additional information has been complied
with in all material respects.
At the respective times, the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto (except
any post-effective amendments filed with the Commission after the later of
(x) one year from the date of this Agreement or (y) the date on which the
distribution of the AMPS is completed) became effective and at the Closing
Time, the Registration Statement, the Rule 462(b) Registration Statement,
the notification on Form N-8A and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act, the 1940 Act and the Rules and Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time, included or
will include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Fund will comply with the requirements
of Rule 434 and the Prospectus shall not be "materially different," as such
term is used in Rule 434, from the prospectus included in the Registration
Statement at the time it became effective.
Each preliminary prospectus delivered to the Underwriters for use in
connection with this offering and the prospectus included in the effective
Registration Statement or as part of any amendment thereto, or filed
pursuant to Rule 497 under the 1933 Act, complied when so filed in all
material respects with the Rules and Regulations and each such preliminary
prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection with
the offering and sale of the AMPS, the Fund has complied or will comply
with the requirements of Rule 111 under the 1933 Act Regulations relating
to the payment of filing fees thereof.
The foregoing representations in this Section 1(a)(i) do not apply (i)
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 or their agents expressly for use in the Registration
Statement, the 462(b) Registration Statement, the Prospectus or preliminary
prospectus (or any amendment or supplement to any of the foregoing), or
(ii) with respect to the representations of the Fund contained in this
Section 1(a)(i), the description of the Advisers (referred to in Section
1(b)(iii) of this Agreement) contained in the foregoing.
(ii) Independent Accountants. As of the date of the report of the
independent accountants contained in the Registration Statement, the
accountants who certified the statement of assets and liabilities included
in the Registration Statement are independent public accountants as
required by the 1933 Act and the Rules and Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related notes,
present fairly the financial position
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of the Fund in all material respects at the date indicated; said statements
have been prepared in conformity with generally accepted accounting
principles ("GAAP").
(iv) Expense Summary. The information set forth in the Prospectus in
the Fee Table has been prepared in accordance with the requirements of Form
N-2 and to the extent estimated or projected, such estimates or projections
are reasonably believed to be attainable and reasonably based.
(v) No Material Adverse Change. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Fund, other than as a result
of a change in the financial markets generally, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Fund, other than those in the
ordinary course of business, which are material with respect to the Fund,
and (C) except for regular, monthly dividends on the Fund's outstanding
common shares, if any, there has been no dividend or distribution of any
kind declared, paid or made by the Fund on any class of its shares.
(vi) Good Standing of the Fund. The Fund has been duly organized and
is validly existing as an unincorporated voluntary association in good
standing under the laws of the Commonwealth of Massachusetts and has full
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Fund is duly qualified to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) No Subsidiaries. The Fund has no subsidiaries.
(viii) Investment Company Status. The Fund is duly registered with the
Commission under the 1940 Act as a closed-end diversified management
investment company, and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Fund or the Investment Adviser, threatened by the
Commission.
(ix) Officers and Trustees. No person is serving or acting as an
officer, trustee or investment adviser of the Fund except in accordance
with the provisions of the 1940 Act and the Rules and Regulations and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission promulgated under the Advisers Act
(the "Advisers Act Rules and Regulations"). Except as disclosed in the
Registration Statement and the Prospectus (or any amendment or supplement
to either of them), no trustee of the Fund is (A) an "interested person"
(as defined in the 0000 Xxx) of the Fund or (B) an "affiliated person" (as
defined in the 0000 Xxx) of any Underwriter. For purposes of this Section
1(a)(ix), the Fund and each Adviser shall be entitled to rely on
representations from such officers and trustees.
(x) Capitalization. The authorized, issued and outstanding shares of
beneficial interest of the Fund are as set forth in the Prospectus as of
the date thereof, except for shares issued in connection with the Fund's
dividend reinvestment plan. All issued and outstanding common shares of
beneficial interest of the Fund have been duly authorized and validly
issued and are fully paid and non-assessable (except as described in the
Registration Statement), and have been offered and sold or exchanged by the
Fund in compliance with all applicable laws (including, without limitation,
federal and state securities laws); none of the outstanding common
4
shares of beneficial interest of the Fund was issued in violation of the
preemptive or other similar rights of any securityholder of the Fund.
(xi) Authorization and Description of AMPS. The AMPS to be purchased
by the Underwriters from the Fund have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued
and delivered by the Fund pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable (except as described in the Registration Statement). The
AMPS conform to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same (to the extent such rights are set forth); no holder of
the AMPS will be subject to personal liability by reason of being such a
holder (except as described in the Registration Statement); and the
issuance of the AMPS is not subject to the preemptive or other similar
rights of any securityholder of the Fund.
(xii) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Fund.
(xiii) Absence of Defaults and Conflicts. The Fund is not in violation
of the Declaration or the By-laws, or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound, or to which any of the property or assets of the
Fund is subject (collectively, "Agreements and Instruments"), except for
such violations or defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement, the
Management Agreement, the Portfolio Management Agreement, the Custodian
Agreement, the Transfer Agency and Services Agreement and the Auction
Agency Agreement referred to in the Registration Statement (as used herein,
the "Management Agreement," the "Portfolio Management Agreement," the
"Custodian Agreement," the "Transfer and Services Agreement" and the
"Auction Agency Agreement," respectively) and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the AMPS and the use of the proceeds
from the sale of the AMPS as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Fund with its obligations
hereunder have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, default
or Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Fund pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action result in
any violation of the provisions of the Declaration or the By-laws, each as
amended from time to time, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Fund or any of its assets, properties or operations, other than State
securities or "blue sky" laws applicable in connection with the purchase
and distribution of the AMPS by the Underwriters pursuant to this
Agreement. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Fund.
(xiv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Fund or the Investment Adviser, threatened, against or affecting the
Fund, which is required to be disclosed in the Registration Statement
5
(other than as disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
materially and adversely to affect the properties or assets of the Fund or
the consummation of the transactions contemplated in this Agreement or the
performance by the Fund of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings, if any, to which the Fund is a
party or of which any of its property or assets is the subject which are
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no material contracts or
documents which are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits thereto by the 1933 Act, the
1940 Act or by the Rules and Regulations which have not been so described
and filed as required.
(xvi) Possession of Intellectual Property. Except for the Service
marks or trademarks "AMPS" and "Auction Market Preferred Shares," either
the Investment Adviser or the Fund owns or possesses, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by the Fund, and the Fund has not received any notice
and is not otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any facts
or circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Fund or the Investment Adviser
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding), invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Fund of its obligations
hereunder, in connection with the offering, the issuance or sale of the
AMPS hereunder or the consummation of the transactions contemplated by this
Agreement, except such as have been already obtained or as may be required
under the 1933 Act, the 1940 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or state securities laws.
(xviii) Possession of Licenses and Permits. The Fund possesses or will
obtain as of the Closing Time such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to operate its properties and to conduct the business as
contemplated in the Prospectus, except where the absence of such possession
would not result in a Material Adverse Effect; the Fund is in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate, have
a Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and the Fund has not
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, if the subject of an
unfavorable decision, ruling or finding, would, singly or in the aggregate,
result in a Material Adverse Effect.
(xix) Advertisements. Any advertising, sales literature or other
promotional material (including "prospectus wrappers", "broker kits," "road
show slides" and "road show scripts" and "electronic road show
presentations") authorized in writing by or prepared by the Fund or the
6
Investment Adviser used in connection with the public offering of the AMPS
(collectively, "sales material") does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading. Moreover, all sales
material complied and will comply in all material respects with the
applicable requirements of the 1933 Act, the 1940 Act, the Rules and
Regulations and the rules and interpretations of the National Association
of Securities Dealers, Inc. ("NASD").
(xx) Subchapter M. The Fund intends to direct the investment of the
proceeds of the offering described in the Registration Statement in such a
manner as to comply with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended ("Subchapter M of the Code" and the
"Code," respectively), and intends to qualify as a regulated investment
company under Subchapter M of the Code.
(xxi) Distribution of Offering Materials. The Fund has not distributed
and, prior to the later to occur of (A) the Closing Time and (B) completion
of the distribution of the AMPS, will not distribute any offering material
in connection with the offering and sale of the AMPS other than the
Registration Statement, a preliminary prospectus, the Prospectus or other
materials, if any, permitted by the 1933 Act or the 1940 Act or the Rules
and Regulations.
(xxii) Accounting Controls. The Fund maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization and with the applicable requirements of the 1940
Act, the Rules and Regulations and the Code; (B) transactions are recorded
as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain
accountability for assets and to maintain compliance with the books and
records requirements under the 1940 Act and the Rules and Regulations; (C)
access to assets is permitted only in accordance with the management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxiii) Absence of Undisclosed Payments. To the Fund's knowledge,
neither the Fund nor any employee or agent of the Fund has made any payment
of funds of the Fund or received or retained any funds, which payment,
receipt or retention of funds is of a character required to be disclosed in
the Prospectus.
(xxiv) Material Agreements. This Agreement, the Management Agreement,
the Custodian Agreement, the Transfer Agency and Services Agreement and the
Auction Agency Agreement have each been duly authorized by all requisite
action on the part of the Fund and executed and delivered by the Fund, as
of the dates noted therein, and each complies with all applicable
provisions of the 1940 Act in all material respects. Assuming due
authorization, execution and delivery by the other parties thereto with
respect to the Management Agreement, the Custodian Agreement, the Transfer
Agency and Services Agreement and the Auction Agency Agreement, each of the
Management Agreement, the Custodian Agreement, the Transfer Agency and
Services Agreement and the Auction Agency Agreement constitutes a valid and
binding agreement of the Fund, enforceable in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing and except as rights to indemnification or
contribution thereunder may be limited by federal or state laws.
7
(xxv) Registration Rights. There are no persons with registration
rights or other similar rights to have any securities of the Fund
registered pursuant to the Registration Statement or otherwise registered
by the Fund under the 1933 Act.
(xxvi) Ratings. The AMPS have been, or prior to the Closing Date will
be, assigned a rating of "Aaa" by Xxxxx'x Investors Service, Inc.
("Moody's").
(xxvii) Leverage. The Fund has no liability for borrowed money,
including under any reverse repurchase agreements.
(b) Representations and Warranties by the Investment Adviser. The
Investment Adviser represents and warrants to each Underwriter, and in the case
of paragraph (iii) below also represents to the Fund, as of the date hereof, and
as of the Closing Time referred to in Section 2(c) hereof as follows:
(i) Good Standing of the Advisers. The Investment Adviser has been
duly organized and is validly existing and in good standing as a limited
liability company under the laws of the State of Delaware, and PIMCO has
been duly organized and is validly existing and in good standing as a
limited liability company under the laws of the State of Delaware with full
limited liability company power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus, and
each is duly qualified as a foreign limited liability company to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, except to the extent that failure to be so
qualified and in good standing would not have a material adverse effect on
either Adviser's ability to provide services to the Fund.
(ii) Investment Adviser Status. Each of the Advisers is duly
registered with the Commission as an investment adviser under the Advisers
Act, the Commission has not issued to either Adviser any notice of any
hearing or other proceeding to consider suspension or revocation of such
registration, and neither Adviser is prohibited by the Advisers Act or the
1940 Act, or the rules and regulations under such acts, from acting under
the Management Agreement for the Fund as contemplated by the Prospectus.
(iii) Description of Advisers. The description of the Advisers in the
Registration Statement and the Prospectus (and any amendment or supplement
to either of them) complied and complies in all material respects with the
provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and
Regulations and the Advisers Act Rules and Regulations and is true and
correct and does 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.
(iv) Capitalization. Each of the Advisers has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Prospectus, this Agreement and under the
Management Agreement or Portfolio Management Agreement to which it is a
party.
(v) Authorization of Agreements; Absence of Defaults and Conflicts.
This Agreement, the Management Agreement and the Portfolio Management
Agreement have each been duly authorized, executed and delivered by each
Adviser that is a party thereto, and (assuming the due authorization,
execution and delivery by each of the parties thereto) the Management
Agreement and the Portfolio Management Agreement each constitutes a valid
and binding obligation of each respective Adviser that is a party thereto,
enforceable against it in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and general equitable principles (whether considered in a proceeding in
equity or at
8
law); and neither the execution and delivery of this Agreement, the
Management Agreement and the Portfolio Management Agreement nor the
performance by either of the Advisers of its obligations hereunder or
thereunder will conflict with, or result in a breach of any of the terms
and provisions of, or constitute, with or without the giving of notice or
lapse of time or both, a default under, any agreement or instrument to
which either Adviser is a party or by which it is bound, the certificate of
formation, the operating agreement, or other organizational documents of
the Advisers, or to each Adviser's knowledge, by any law, order, decree,
rule or regulation applicable to it of any jurisdiction, court, federal or
state regulatory body, administrative agency or other governmental body,
stock exchange or securities association having jurisdiction over the
Advisers or their respective properties or operations; and no consent,
approval, authorization or order of any court or governmental authority or
agency is required for the consummation by the Advisers of the transactions
contemplated by, as applicable, this Agreement, the Management Agreement
and the Portfolio Management Agreement except as have been obtained or may
be required under the 1933 Act, the 1940 Act, the 1934 Act or state
securities laws.
(vi) No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred any
event which should reasonably be expected to have a material adverse effect
on the ability of either Adviser to perform its respective obligations
under this Agreement and the respective Management Agreement and Portfolio
Management Agreement to which it is a party.
(vii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Advisers, threatened against or affecting either Adviser or any
"affiliated person" of either Adviser (as such term is defined in the 0000
Xxx) or any partners, members, directors, officers or employees of the
foregoing, whether or not arising in the ordinary course of business, which
might reasonably be expected to result in any material adverse change in
the condition, financial or otherwise, or earnings, business affairs or
business prospects of the relevant Adviser, materially and adversely affect
the properties or assets of the relevant Adviser or materially impair or
adversely affect the ability of the relevant Adviser to function as an
investment adviser or perform its obligations under the Management
Agreement or the Portfolio Management Agreement, or which is required to be
disclosed in the Registration Statement and the Prospectus and has not been
so disclosed.
(viii) Absence of Violation or Default. Neither Adviser is in
violation of its certificate of formation, its operating agreement or other
organizational documents or in default under any agreement, indenture or
instrument, where such violation or default would reasonably be expected to
have a material adverse effect on either Adviser's ability to function as
an investment adviser or perform its obligations under the Management
Agreement or Portfolio Management Agreement, as applicable.
(c) Officer's Certificates. Any certificate signed by any officer of the
Fund or an Adviser delivered to the Representative or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or the
relevant Adviser, as the case may be, to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) AMPS. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Fund
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Fund, at the
price per share set forth in Schedule B, the number of AMPS set forth in
Schedule A opposite the name of such
9
Underwriter, plus any additional number of AMPS which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Commission. The Fund agrees to pay to the Underwriters a commission,
set forth in Schedule B, as compensation to the Underwriters for their
commitments under this Agreement.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the AMPS shall be made at the offices of Xxxxxxxx Chance US
LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as shall
be agreed upon by the Representative and the Fund, at 10:00 A.M. (Eastern time)
on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on
any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Representative
and the Fund (such time and date of payment and delivery being herein called
"Closing Time").
Payment shall be made to the Fund by wire transfer of immediately available
funds to a bank account designated by the Fund, against delivery to the
Representative for the respective accounts of the Underwriters of certificates
for the AMPS to be purchased by them. It is understood that each Underwriter has
authorized the Representative, for its account, to accept delivery of and
receipt for, and make payment of the purchase price for the AMPS it has agreed
to purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the AMPS to be purchased by any Underwriter whose funds have not been
received by the Closing Time, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the AMPS, each
representing one series thereof, shall be registered in the name of Cede & Co.,
as nominee for the Depository Trust Company. The certificates for the AMPS will
be made available for examination and packaging by the Representative in the
City of New York not later than 10:00 A.M. (Eastern time) on the business day
prior to the Closing Time.
SECTION 3. Covenants.
(a) The Fund and the Investment Adviser, jointly and severally, covenant
with each Underwriter and with respect to 3(c) the Underwriters, severally and
not jointly, covenant with the Fund and the Advisers, as follows:
(i) Compliance with Securities Regulations and Commission Requests.
With respect to the offering of the AMPS, the Fund, subject to Section
3(a)(ii), will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Representative immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of
the qualification of the AMPS for offering or sale in any jurisdiction, or
of the initiation or, to the knowledge of the Fund or the Investment
Adviser, threatening of any proceedings for any of such purposes. The Fund
will promptly effect the filings necessary pursuant to Rule 497 and will
take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 497 was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Fund will make every reasonable effort
to prevent the issuance of any stop order, or order of suspension or
revocation of registration pursuant to Section 8(e) of the 1940 Act, and,
if any such
10
stop order or order of suspension or revocation of registration is issued,
to obtain the lifting thereof at the earliest possible moment.
(ii) Filing of Amendments. With respect to the offering of the AMPS,
the Fund will give the Representative notice of its intention to file or
prepare any amendment to the Registration Statement (including any filing
under Rule 462(b)), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the time
it became effective or to the Prospectus, will furnish the Representative
with copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Representative or counsel for the Underwriters
shall reasonably object.
(iii) Delivery of Registration Statements. The Fund has furnished or
will deliver to the Representative and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representative,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T. No
copy of a post-effective amendment shall be required to be delivered after
one year from the date hereof.
(iv) Delivery of Prospectuses. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Fund hereby consents to
the use of such copies for purposes permitted under the 1933 Act. The Fund
will furnish to each Underwriter, without charge, during the period when
the Prospectus is required to be delivered by an underwriter or dealer
under the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(v) Continued Compliance with Securities Laws. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the AMPS, any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of counsel for
the Underwriters or for the Fund, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the Rules and Regulations, the Fund will
promptly prepare and file with the Commission, subject to Section 3(a)(ii),
such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply
with such requirements, and the Fund will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters may
reasonably request; provided that, if the supplement or amendment is
required 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 supplement or amendment to the
Underwriters and dealers at a reasonable charge not to exceed the actual
cost thereof to the Fund.
11
(vi) Blue Sky Qualifications. The Fund will use its best efforts, in
cooperation with the Underwriters, to qualify the AMPS for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representative may designate and
to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement and
any Rule 462(b) Registration Statement; provided, however, that the Fund
shall not be obligated to file any general consent to service of process or
to qualify as a foreign business trust or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the AMPS have been
so qualified, the Fund will file such statements and reports, if any, as
may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(vii) Rule 158. The Fund will make generally available to its
securityholders as soon as practicable an earnings statement, if
applicable, for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds received by
it from the sale of the AMPS substantially in the manner specified in the
Prospectus under "Use of Proceeds".
(ix) Reporting Requirements. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1940 Act
and the 1934 Act within the time periods required by the 1940 Act and the
Rules and Regulations and the 1934 Act and the rules and regulations of the
Commission thereunder, respectively.
(x) Subchapter M. The Fund will use its best efforts to comply with
the requirements of Subchapter M of the Code to qualify as a regulated
investment company under the Code.
(xi) No Manipulation of Market for AMPS. The Fund will not (a) take,
directly or indirectly, any action designed to cause or to result in, or
that might reasonably be expected to constitute, the stabilization (as
defined in Regulation M under the 0000 Xxx) or manipulation of the price of
any security of the Fund to facilitate the sale or resale of the AMPS in
violation of federal or state securities laws, and (b) except for share
repurchases permitted in accordance with applicable laws and purchases of
AMPS in connection with the Fund's dividend reinvestment plan, until the
Closing Date, if any, (i) sell, bid for or purchase the AMPS or pay any
person any compensation for soliciting purchases of the AMPS or (ii) pay or
agree to pay to any person any compensation for soliciting another to
purchase any other AMPS of the Fund.
(xii) Rule 462(b) Registration Statement. If the Fund elects to rely
upon Rule 462(b), the Fund shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Fund shall at
the time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the 1933 Act.
(xiii) Accountant's Confirmation. The Fund will furnish to the
Underwriters, on the date on which delivery is made to the Rating Agencies,
the Accountant's Confirmation (as defined in the By-laws) for the first
Valuation Date (as defined in the Declaration) following the Closing Time.
(b) Except as provided in this Agreement, the Fund will not sell, contract
to sell or otherwise dispose of any of its preferred shares of beneficial
interest of the same series as the AMPS or any
12
securities convertible into or exercisable or exchangeable for its preferred
shares of beneficial interest of the same series as the AMPS, or grant any
options or warrants to purchase its preferred shares of beneficial interest of
the same series as the AMPS, for a period of 180 days after the date of the
Prospectus, without the prior written consent of Xxxxxxx Xxxxx.
(c) No later than the Closing Time, the Underwriters will provide, and will
cause any selling group member to whom they have sold AMPS to provide, Deutsche
Bank Trust Company Americas, as auction agent for the AMPS (the "Auction
Agent"), with a list of the record names of the persons to whom they have sold
AMPS, the number of AMPS sold to each such person, and the number of AMPS they
are holding as of the Closing Date; provided that in lieu thereof, an
Underwriter may provide the Auction Agent with a list indicating itself as the
sole holder of all the AMPS sold by such Underwriter.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the reasonable
costs of the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the AMPS, (iii) the preparation, issuance and delivery of the certificates
for the AMPS to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
AMPS to the Underwriters, (iv) the fees and disbursements of the Fund's counsel,
accountants and other advisers, (v) the qualification of the AMPS under
securities laws in accordance with the provisions of Section 3(a)(vi) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky survey (if applicable) and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, Prospectus and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of any Blue Sky
survey and any supplement thereto, and (viii) the fees and expenses of any
transfer agent or registrar for the AMPS.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Fund and the Investment Adviser, jointly and severally, agree that
they shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Fund and the Investment
Adviser contained in Section 1 hereof or in certificates of any officer of the
Fund or the Investment Adviser delivered pursuant to the provisions hereof, to
the performance by the Fund and the Investment Adviser of their respective
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or, to the knowledge of counsel to
the Fund and counsel to the Investment Adviser, threatened by the Commission,
and any request on the part of the Commission for additional information shall
have been complied with or waived to the reasonable satisfaction of counsel to
the Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 497 (or a post-effective
amendment providing such information
13
shall have been filed and declared effective in accordance with the requirements
of Rule 430A or a certification must have been filed in accordance with Rule
497(j)) or, if the Fund has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 497.
(b) Opinion of Counsel for the Fund and the Advisers. At Closing Time, the
Representative shall have received the favorable opinions, dated as of Closing
Time, of Ropes & Xxxx, counsel for the Fund and Xxxxx Xxxxxxx, Esq., internal
counsel for the Investment Adviser, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letters for each of the other Underwriters with respect to the matters set forth
in Exhibits A-1 and A-2 hereto, respectively, or in such other form and
substance as may be reasonably satisfactory to the Underwriters. Such counsel
may state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Fund and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance US LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (A) (i), (ii), (vi), (vii)
(solely as to preemptive or other similar rights arising by operation of law or
under the Declaration or By-laws of the Fund), (viii) through (x), inclusive,
(xiii), (xiv) (solely as to the information in the Prospectus under "Description
of AMPS") and the last paragraph of Exhibit A hereto. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the Representative. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Fund and certificates of public officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business, and the
Representative shall have received (A) a certificate of a duly authorized
officer of the Fund and of the chief financial or chief accounting officer of
the Fund and of the President or a Vice President or Managing Director of the
Investment Adviser, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties in
Sections 1(a) and (b) hereof, as applicable, are true and correct with the same
force and effect as though expressly made at and as of Closing Time, (iii) each
of the Fund and the Advisers, respectively, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied pursuant to
this Agreement at or prior to Closing Time, and (iv) with respect to the Fund
only, no stop order suspending the effectiveness of the Registration Statement,
or order of suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, has been issued with respect to the Fund and no proceedings for
any such purpose have been instituted or are pending or are contemplated by the
Commission and (B) a certificate of the President or a Vice President or
Managing Director of PIMCO, dated as of Closing Time, to the effect that (i) the
description of PIMCO and its business, and the statements attributable to PIMCO
in the Registration Statement (and any amendment or supplement thereto) under
the headings "Prospectus Summary--Portfolio Manager," "Management of the Fund"
and "Investment Manager and Portfolio Manager," at the time such Registration
Statement became effective, were true and correct and did 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 or (ii) the description of PIMCO and its business, and the statements
attributable to PIMCO in the Prospectus (and any amendment or supplement
thereto) under the headings "Prospectus Summary--Portfolio Manager" and
"Management of the Fund," at the time the Prospectus was issued, were true and
correct and did not, or at the Closing Time are true and correct and do not,
contain any untrue statement of a material fact or omit to state any material
fact required to be
14
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from PricewaterhouseCoopers LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Rating. The Fund shall have delivered and the Representative shall have
received evidence satisfactory to the Representative that the AMPS are rated
`Aaa' by Xxxxx'x as of the Closing Date, and there shall not have been given any
notice of any intended or potential downgrading, or of any review for a
potential downgrading, in the rating accorded to the AMPS by Xxxxx'x.
(h) Asset Coverage. As of the Closing Time and assuming the receipt of the
net proceeds from the sale of the AMPS, the 1940 Act Preferred Shares Asset
Coverage and the Preferred Shares Basic Maintenance Amount (each as defined in
the Declaration) each will be met. For purposes of this Section 5(h), the Trust
may use portfolio holdings and valuations as of the close of business of any day
not more than 48 hours (not including Sundays or holidays) preceding the Closing
Time.
(i) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with opinions, certificates and other documents as
they may reasonably require from the Fund and the Advisers for the purpose of
enabling them to pass upon the issuance and sale of the AMPS as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Fund and the Advisers in connection with the
organization and registration of the Fund under the 1940 Act and the issuance
and sale of the AMPS as herein contemplated shall be reasonably satisfactory in
form and substance to the Representative and counsel for the Underwriters.
(j) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by notice to the Fund at any
time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 13 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Investment Adviser,
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, and any director, officer,
employee or affiliate thereof as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a
15
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the prior written consent
of the Fund and the Investment Adviser; and
(iii) against any and all expense whatsoever, as incurred and as
reasonably incurred (including the reasonable fees and disbursements of
counsel chosen by Xxxxxxx Xxxxx), in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or either
Adviser by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage and expense purchased the AMPS which are the subject
thereof if the Prospectus (as amended or supplemented if the Fund shall have
furnished any amendments or supplements thereto) corrected any such alleged
untrue statement or omission and if such Prospectus was delivered to such
Underwriter in a timely manner and if such Underwriter failed to send or give a
copy of the Prospectus (as so amended or supplemented) to such person at or
prior to the written confirmation of the sale of such AMPS to such person.
(b) Indemnification of Fund, Investment Adviser, Trustees, Directors and
Officers. Each Underwriter severally agrees to indemnify and hold harmless the
Fund, PIMCO and the Investment Adviser, their respective directors, members,
shareholders, partners and trustees, each of the Fund's officers who signed the
Registration Statement, and each person, if any, who controls the Fund or the
Investment Adviser within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Fund or the Investment Adviser by such
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(c) Indemnification for Marketing Materials. In addition to the foregoing
indemnification, the Fund and the Investment Adviser also, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and
16
expense described in the indemnity contained in Section 6(a), as limited by the
provisos set forth therein, with respect to any sales material created by the
Fund for use in connection with the offering and sale of the AMPS, but only if
such sales materials are used in accordance with any instructions provided by
the Fund or set forth in such sales materials; provided, however, that neither
Fund nor the Investment Adviser will be liable to any Underwriter with respect
to any sales material to the extent that the Fund and the Investment Adviser
shall sustain the burden of proving that any such loss, liability, claim, damage
or expense resulted from the fact that such Underwriter, in contravention of a
requirement of this Agreement or applicable law, sold AMPS to a person to whom
such Underwriter failed to send or give, at or prior to the Closing Time, a copy
of the Prospectus, as then amended or supplemented if: (i) the Fund or either
Adviser had previously furnished copies thereof (sufficiently in advance of the
Closing Time to allow for distribution by the Closing Time) to the Underwriter
and the loss, liability, claim, damage or expense of such Underwriter resulted
from an untrue statement or omission of a material fact contained in or omitted
from such sales material which was corrected in the Prospectus as, if
applicable, amended or supplemented prior to the Closing Time and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person and (ii) such failure to give or send such
Prospectus by the Closing Time to the party or parties asserting such loss,
liability, claim, damage or expense would have constituted a defense to the
claim asserted by such person.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Fund and the Investment Adviser. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
17
(f) Indemnification or Contribution by the Fund. Any indemnification or
contribution by the Fund shall be subject to the requirements and limitations of
Section 17(i) of the 1940 Act.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then, in lieu of indemnifying such indemnified party, each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Fund and/or the Investment Adviser on the one hand and the Underwriters on
the other hand from the offering of the AMPS pursuant to this Agreement or (ii)
if the allocation provided by clause (i) 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/or
the Investment Adviser on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Fund and/or the Investment Adviser on
the one hand and the Underwriters on the other hand in connection with the
offering of the AMPS pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
AMPS pursuant to this Agreement (before deducting expenses) received by the Fund
and the total underwriting discount received by the Underwriters (whether from
the Fund or otherwise), in each case as set forth on the cover of the Prospectus
or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to
the aggregate initial public offering price of the AMPS as set forth on such
cover.
The relative fault of the Fund and/or the Investment Adviser on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Fund or the Investment Adviser or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Fund, the Investment Adviser and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the AMPS underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to
18
contribution as such Underwriter, and each trustee and shareholder of the Fund
and each director and member of the Investment Adviser, respectively, each
officer of the Fund who signed the Registration Statement, and each person, if
any, who controls the Fund or the Investment Adviser, within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Fund and the Investment Adviser, respectively. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of AMPS set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Fund or the Advisers submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Fund or the Advisers, and shall survive delivery of the
AMPS to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Fund, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Fund or the Advisers, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representative, impracticable or inadvisable to market the AMPS
or to enforce contracts for the sale of the AMPS, or (iii) if trading in the
common shares of the Fund has been suspended or materially limited by the
Commission or the New York Stock Exchange (the "NYSE"), or if trading generally
on the NYSE or the American Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7, 8 and 13 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time to purchase
the AMPS which it or they are obligated to purchase under this Agreement (the
"Defaulted AMPS"), the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted AMPS in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted AMPS does not exceed 10% of the number of
AMPS to be purchased on such date, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount thereof in
the proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
19
(b) if the number of Defaulted AMPS exceeds 10% of the number of AMPS to be
purchased on such date, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representative or the Fund shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representative, Xxxxxxx Xxxxx & Co., North Tower, 4 World Financial Center, Xxx
Xxxx, Xxx Xxxx 00000, attention of Equity Capital Markets; and notices to the
Fund or the Advisers shall be directed, as appropriate, to the office of PIMCO
Advisors Fund Management LLC, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention Xxxx Xxxxx.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding upon each of
the Underwriters, the Fund, each Adviser and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund, each Adviser and their respective successors and the
controlling persons and shareholders, partners, members, directors, officers and
trustees referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Fund, each Adviser and their
respective partners and successors, and said controlling persons and officers,
trustees, shareholders, members, partners and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of AMPS from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 15. Massachusetts Business Trust
A copy of the Declaration is on file with the Secretary of the Commonwealth
of Massachusetts, and notice is hereby given that this 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 of or arising out of this instrument are not binding upon any of the
trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund.
20
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters, the Fund and the Investment Adviser in accordance with its terms.
Very truly yours,
PIMCO CORPORATE OPPORTUNITY FUND
By:
----------------------------------
Name:
Title:
PIMCO ADVISORS FUND MANAGEMENT LLC
By:
----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
X.X. XXXXXXX & SONS, INC.
UBS WARBURG LLC
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By:
-------------------------------------
Authorized Signatory
For themselves and as
Representatives of the
other Underwriters named
in Schedule A hereto.
21
SCHEDULE A
Name of Underwriter Number of AMPS
------------------- -------------------------------------------------
Series M Series T Series W Series TH Series F
-------- -------- -------- --------- --------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.............. 2,157 2,157 2,157 2,157 2,157
UBS Warburg LLC....................... 1,459 1,459 1,459 1,459 1,459
X.X. Xxxxxxx & Sons, Inc.............. 904 904 904 904 904
-------- -------- -------- --------- --------
Totals................................ 4,520 4,520 4,520 4,520 4,520
-------------------------------------------------------------------------------------------
Sch A-1
SCHEDULE B
PIMCO Corporate Opportunity Fund
4,520 Auction Market Preferred Shares, Series M
4,520 Auction Market Preferred Shares, Series T
4,520 Auction Market Preferred Shares, Series W
4,520 Auction Market Preferred Shares, Series TH
4,520 Auction Market Preferred Shares, Series F
Liquidation Preference $25,000 per Share
1. The liquidation preference per share for the AMPS, determined as
provided in said Section 2, shall be $25,000.
2. The purchase price per share for the AMPS to be paid by the several
Underwriters shall be $24,750, such discount from the liquidation preference
representing the commission to be paid to the Underwriters for their commitment
hereunder of $250.
3. The initial dividend rate of the AMPS, Series M shall be [ ]% per annum.
4. The initial dividend rate of the AMPS, Series T shall be [ ]% per annum.
5. The initial dividend rate of the AMPS, Series W shall be [ ]% per annum.
6. The initial dividend rate of the AMPS, Series TH shall be [ ]% per
annum.
7. The initial dividend rate of the AMPS, Series F shall be [ ]% per annum.
Sch B-1
Exhibit A-1
FORM OF OPINION OF FUND'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5 (b)
[ROPES AND XXXX LETTERHEAD APPEARS HERE]
February ___, 2003
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to PIMCO Corporate Opportunity Fund (the "Fund")
in connection with the proposed issuance of its 4,520 Auction Market Preferred
Shares, Series M, 4,520 Auction Market Preferred Shares, Series T, 4,520 Auction
Market Preferred Shares, Series W, 4,520 Auction Market Preferred Shares, Series
TH, and 4,520 Auction Market Preferred Shares, Series F, (collectively, the
"AMPS"). This opinion is furnished to you pursuant to Section 5(b) of the
Purchase Agreement dated as of February ___, 2003 (the "Purchase Agreement")
among the Fund, PIMCO Advisors Fund Management LLC (the "Investment Adviser")
and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, UBS Warburg LLC and X.X.
Xxxxxxx & Sons, Inc. (collectively, the "Underwriters"). Capitalized terms used
in this opinion, unless otherwise defined, have the meanings specified in the
Purchase Agreement.
We have examined signed copies of the registration statement of the Fund on
Form N-2 (File No. 333-102464) under the Securities Act of 1933, as amended (the
"Securities Act") (which also constitutes Amendment No. 3 to the Fund's
Registration Statement on Form N-2 (File No. 811-21238) under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), including all
exhibits thereto, as filed with the Securities and Exchange Commission (the
"Commission") on January 13, 2003 (the "Original Registration Statement"),
Pre-Effective Amendment No. 1 to the Original Registration Statement, including
all exhibits thereto, as filed with the Commission on February ___, 2003
("Pre-Effective Amendment No. 1") and Pre-Effective Amendment No. 2 to the
Original Registration Statement, including all exhibits thereto, as filed with
the Commission on February ___, 2003 ("Pre-Effective Amendment No. 2" and,
together with the Original Registration Statement and Pre-Effective Amendment
No. 1, the "Registration Statement"); the Fund's Notification of Registration on
Form N-8A (File No. 811-21238) under the Investment Company Act, as filed with
the Commission on October 23, 2002 (the "Notification of Registration"); the
Fund's Amended and
A-1
Xxxxxxx Xxxxx & Co. February ___, 2003
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc. -2-
------------
Restated Agreement and Declaration of Trust, as amended to the date hereof (the
"Declaration of Trust"), on file in the offices of the Secretary of The
Commonwealth of Massachusetts; the Second Amended and Restated By-laws of the
Fund, as amended to the date hereof (the "Amended By-laws"); a copy of the
Prospectus dated February ___, 2003, relating to the AMPS and the Statement of
Additional Information of the Fund dated February ___, 2003, each as filed with
the Commission pursuant to Rule 497 under the Securities Act on February ___,
2003 (together, the "Prospectus"); the Investment Management Agreement dated as
of November 19, 2002, between the Fund and the Investment Adviser (the
"Investment Management Agreement"); the Portfolio Management Agreement dated as
of November 19, 2002, between Pacific Investment Management Company LLC (the
"Portfolio Manager") and the Investment Adviser (the "Portfolio Management
Agreement"), as agreed to and accepted by the Fund; the Custodian and Investment
Accounting Agreement dated as of December 10, 2002, between the Fund and State
Street Bank and Trust Company (the "Custodian Agreement"); and the Auction
Agency Agreement dated as of February ___, 2003, between the Fund and Deutsche
Bank Trust Company Americas (the "Auction Agency Agreement," and, together with
the Custodian Agreement, the "Fund Agreements"); and the Purchase Agreement.
Additionally, we have relied upon the oral representation of Xxxxx X'Xxxxxxx of
the Commission staff to the effect that the Registration Statement became
effective as of [ ] p.m. on February ___, 2003, and the oral representation by a
member of the Commission staff [on the date hereof] 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 shareholders and the Board of Trustees
of the Fund and copies of resolutions of the Board of Trustees of the Fund
certified by the Secretary of the Fund, the documents delivered to the
Underwriters by the Fund, the Investment Adviser and the Portfolio Manager dated
as of the date hereof pursuant to the Purchase Agreement and such other
documents, including certificates of officers of the Fund, as we have deemed
necessary for purposes of rendering our opinions below. For purposes of
paragraph 2 below, we have relied solely on (1) the certificate dated February
___, 2003, of the Secretary of State of the State of California as to the
entitlement of the Fund to transact intrastate business in the State of
California, (2) a Certificate of the Special Deputy Secretary of State of the
State of New York dated February ___, 2003, certifying copies of (a) a
Certificate of Designation by the Fund dated November 26, 2002 and (b) a
Statement under Section 18 of the New York General Associations Law, (3) a
Filing Receipt of the Department of State of the State of New York dated
December 2, 2002 relating to the Fund and (4) a Certificate dated February ___,
2003 of the Special Deputy Secretary of State of the State of New York
certifying that the Fund filed a Certificate of Designation in the Department of
State of the State of New York pursuant to the New York General Associations Law
on December 2, 2002. 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. For purposes of our opinion regarding the
effectiveness of the Registration Statement we are relying solely on the oral
representations of the Commission staff.
Xxxxxxx Xxxxx & Co. February ___, 2003
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc. -3-
------------
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 each of the Purchase Agreement and the Auction Agency
Agreement provides that it is to be governed by and construed in accordance with
the laws of the State of New York 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 paragraphs 6 and 17 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 Fund Agreements and the Investment Management Agreement 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 Adviser and the Portfolio Manager to the
extent we believe reasonable with respect to such matters and have relied, inter
alia, upon representations made by the Fund and the Investment Adviser in the
Purchase Agreement, representations made by the Portfolio Manager to the
Investment Adviser and representations made to us by one or more officers of the
Fund, the Investment Adviser or the Portfolio Manager. We have not independently
verified the accuracy of such representations. Where our opinion relates to our
"knowledge," that term means the conscious awareness of facts or other
information by any lawyer in our firm giving substantive attention to the
representation of the Fund with respect to the transactions contemplated by the
Purchase Agreement, and does not require or imply (i) any examination of this
firm's, any such lawyer's or any other person's or entity's files, or (ii) that
any inquiry was made of any lawyer (other than the lawyers described above). In
respect of our opinions set forth in paragraphs 5, 8, 10, 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 filed with
the Commission on or before the Closing Time, 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 Commission staff on the date
hereof, 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.
Xxxxxxx Xxxxx & Co. February ___, 2003
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc. -4-
------------
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 Certificate of Designation
relating to the Fund's conduct of business in the State of New York is on file
with the Department of State of the State of New York, and the Fund is entitled
to transact intrastate business in the State of California.
3. The Fund's authorized capitalization is as set forth in the Registration
Statement and the Prospectus. The AMPS conform in all material respects as to
legal matters to the description of them under the sections entitled
"Description of AMPS" and "Description of Capital Structure" in the Prospectus.
The AMPS have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms of the
Purchase Agreement, will be validly issued, fully paid and, subject to the
penultimate paragraph of this opinion letter, non-assessable. No person is
entitled to any preemptive or other similar rights with respect to the AMPS.
4. The outstanding common shares of beneficial interest of the Fund, par
value $0.00001, have been duly authorized and are validly issued, fully paid
and, subject to the penultimate paragraph of this opinion letter,
non-assessable, and the 6,981 common shares of beneficial interest issued to the
Investment Adviser on November 19, 2002 have been issued in one or more
transactions exempt from the registration requirements of the Securities Act.
5. The Fund was deemed to be registered under Section 8(a) of the
Investment Company Act upon receipt by the Commission of the Notification of
Registration. To our knowledge, the Commission has not issued to the Fund notice
of any hearing or other proceeding to consider suspension or revocation of any
such registration statement. 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 AMPS to
make the public offering and consummate the sale of the AMPS pursuant to the
Purchase Agreement.
6. The Fund has, or at the relevant time had, 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 of the Fund Agreements has been
duly and validly authorized, executed and delivered by the Fund. Each of the
Fund Agreements, the Investment Management Agreement and the Portfolio
Management 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, and the rules and regulations thereunder
(except we express no opinion as to the reasonableness or fairness of
compensation payable under such agreements). 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
Xxxxxxx Xxxxx & Co. February ___, 2003
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc. -5-
------------
to general equity principles (regardless of whether enforceability is considered
in a proceeding in equity or at law).
7. The Fund has, or at relevant time had, full power and authority to enter
into each of the Investment Management Agreement and the Purchase Agreement and
to perform all of the terms and provisions thereof to be carried out by it. The
Investment Management Agreement and the Purchase Agreement have been duly and
validly authorized, executed and delivered by the Fund. Assuming due
authorization, execution and delivery by the other party thereto, the Investment
Management Agreement constitutes the legal, valid and binding obligation of the
Fund enforceable in accordance with its terms (except we express no opinion as
to the reasonableness or fairness of compensation payable under such
agreements), 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).
8. None of (a) the execution and delivery by the Fund of the Investment
Management Agreement, the Purchase Agreement or any of the Fund Agreements, (b)
the issuance and sale by the Fund of the AMPS as contemplated by the Purchase
Agreement and (c) the performance by the Fund of its obligations under the
Investment Management Agreement, the Purchase Agreement or any of the Fund
Agreements or the consummation by the Fund of the other transactions
contemplated by the Investment Management Agreement, the Purchase Agreement or
any of the Fund Agreements, conflicts or will conflict with, or results or will
result in a breach of, or the creation or imposition of any lien, charge or
encumbrance upon any assets or property of the Fund pursuant to, the Declaration
of Trust or the Amended 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 to
which its property is subject, or violates or will violate any federal or
Massachusetts statute, law or regulation or any judgment, injunction, order or
decree of any federal or Massachusetts 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.
9. To our knowledge, the Fund is not in breach of, or in default under, its
Declaration of Trust or Amended By-laws, or any material written agreement or
instrument to which it is a party or by which it or its property is bound or
affected.
10. No consent, approval, authorization or order of or registration with
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 Purchase
Agreement and the Fund Agreements, except such as (a) have been obtained under
the Securities Act or 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 AMPS by the Underwriters
pursuant to the Purchase Agreement.
Xxxxxxx Xxxxx & Co. February ___, 2003
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc. -6-
------------
11. To our knowledge, there are no legal, governmental or court 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 our knowledge, 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 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 and accurate summary of the principal federal
income tax rules currently in effect applicable to the Fund and to the purchase,
ownership and disposition of the AMPS.
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 effective time set forth above, and the
Prospectus (except as aforesaid), as of the date thereof, complied as to form in
all material respects with the applicable requirements of the Securities Act and
the Investment Company Act and the rules and regulations thereunder, and the
Notification of Registration, when filed with the Commission, complied as to
form in all material respects with the applicable requirements of the Investment
Company Act and the rules and regulations thereunder.
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, 13 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 Adviser 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 Adviser 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 Adviser, the Portfolio
Manager and their affairs were disclosed to us or that our familiarity with the
Fund and the Investment Adviser or any familiarity with the Portfolio Manager is
such that we would have necessarily recognized the materiality of such facts as
were disclosed to us, and we have to a large extent relied upon statements of
representatives of the Fund, the Investment Adviser 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
connection 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 the effective date of
the Registration Statement, the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated
Xxxxxxx Xxxxx & Co. February ___, 2003
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc. -7-
------------
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).
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 Xxxxxxxx Chance US
LLP 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,
Exhibit A-2
FORM OF OPINION OF ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
February ___, 2003
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: PIMCO Advisors Fund Management LLC
Ladies and Gentlemen:
I am the Chief Legal Officer of PIMCO Advisors Fund Management LLC, a
Delaware limited liability company ("PAFM"), and have counseled PAFM in such
capacity in connection with the sale to you by PIMCO Corporate Opportunity Fund
(the "Fund"), a voluntary association with transferable shares organized and
existing under and by virtue of the laws of The Commonwealth of Massachusetts
(commonly referred to as a "Massachusetts business trust"), of 4,520 Auction
Market Preferred Shares, Series M, 4,520 Auction Market Preferred Shares, Series
T, 4,520 Auction Market Preferred Shares, Series W, 4,520 Auction Market
Preferred Shares, Series TH, and 4,520 Auction Market Preferred Shares, Series
F, of the Fund (collectively, the "AMPS"), pursuant to a registration statement
on Form N-2 under the Securities Act of 1933, as amended (the "Securities Act")
and the Investment Company Act of 1940, as amended (the "Investment Company
Act"), filed with the Securities and Exchange Commission (the "Commission") on
January 13, 2003 (Securities Act File No. 333-102464, and Investment Company Act
File No. 811-21238), as amended by Pre-Effective Amendment No. 1 filed with the
Commission on February ___, 2003 and Pre-Effective Amendment No. 2 filed with
the Commission on February __, 2003 (such filings collectively referred to
herein as the "Registration Statement"), and a purchase agreement dated February
___, 2003 by and among you, the Fund and PAFM (the "Purchase Agreement").
This opinion is rendered to you pursuant to Section 5(b) of the Purchase
Agreement. Capitalized terms used herein without definition have the meanings
assigned to them in the Purchase Agreement.
A-4
February __, 2003
Page 2
As such legal officer, 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 Purchase Agreement;
(b) that certain Investment Management Agreement by and between the Fund
and PAFM, dated as of November 19, 2002; and
(c) that certain Portfolio Management Agreement by and between Pacific
Investment Management Company LLC and PAFM, as accepted and agreed to
by the Fund, dated as of November 19, 2002.
The documents described in subsections (a)-(c) 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 PAFM 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 PAFM 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 4 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 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
Chief Legal Officer of PAFM.
A-5
February __, 2003
Page 3
Subject to the foregoing and the other matters set forth herein, it is my
opinion that, as of the date hereof:
1. PAFM is a limited liability company and is validly existing and in good
standing under the Delaware Limited Liability Company Act (6 Del. C ss.. 18-101,
et seq.) with all necessary limited liability company 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 on certificates from public
officials, I confirm that PAFM is qualified to do business in the following
States: California, New York and Connecticut, such States being those in which
its ownership or leasing of property or its conducting of business may require
such qualification and where failure to so qualify would have a material adverse
effect on the ability of PAFM 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
PAFM have been duly authorized by all necessary limited liability company action
of PAFM and no other actions on the part of PAFM or its unitholders or any
subsidiary of PAFM or its unitholders is necessary to authorize and consummate
the transactions contemplated thereby, and the Transaction Documents have been
duly executed and delivered by PAFM.
3. Each of the Investment Management Agreement and the Portfolio Management
Agreement constitutes a legally valid and binding agreement of PAFM, enforceable
against PAFM in accordance with its terms.
4. Neither the execution and delivery of the Transaction Documents by PAFM,
nor the consummation by PAFM of the transactions contemplated thereby, nor
compliance by PAFM with any of the terms and provisions thereof will:
(i) violate any provision of the Limited Liability Company Agreement
of PAFM, effective May 23, 2000, as amended on July 1, 2001, December 12,
2001, and October 31, 2002, which is still in full force and effect and
which has not been further amended or supplemented through the date hereof,
(ii) violate any federal, Delaware or New York statute, rule or
regulation applicable to PAFM (other than federal and state securities or
blue sky laws, the Investment Company Act and the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), as to which I express no
opinion),
(iii) violate any agreement to which PAFM is a party or by which it is
bound and which is material to PAFM's businesses taken as a whole (the
"Material Agreements"),
(iv) violate any order, writ, injunction or decree, known to me and
applicable to PAFM, or
A-6
February __, 2003
Page 4
(v) to the best of my knowledge, require any consents, approvals,
authorizations, registrations, declarations or filings by PAFM under any
federal or Delaware statute, rule or regulation applicable to PAFM, except
as have been obtained under the Securities Act, the Investment Company Act
or the Advisers Act.
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 PAFM's businesses.
5. PAFM 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 dated
February ___, 2003, relating to the AMPS (the "Prospectus").
6. The description of PAFM and its business, and the statements
attributable to PAFM, set forth in the Registration Statement or the Prospectus
under the headings "Prospectus Summary--Investment Manager" and "Management of
the Fund--Investment Manager" 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 (with respect to the
Prospectus, 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 PAFM of a nature required to be disclosed in the Registration Statement
or Prospectus or that might reasonably result in any material adverse change in
the ability of PAFM to fulfill its obligations under any of the Transaction
Documents.
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;
A-7
February __, 2003
Page 5
(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 PAFM may be dependent upon such
matters, I assume for purposes of this opinion that: (i) all parties to the
Transaction Documents other than PAFM 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 PAFM 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 PAFM are a party have been duly
authorized, executed and delivered by such parties and, other than PAFM,
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.
A-8
February __, 2003
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,
A-9
February ___, 2003
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pacific Investment Management Company LLC
Ladies and Gentlemen:
I am the Chief Legal Officer of PIMCO Advisors Fund Management LLC, a
Delaware limited liability company ("PAFM"). PAFM is an affiliate of and under
common control with Pacific Investment Management Company LLC, a Delaware
limited liability company ("PIMCO"). I have discussed the matters covered by
this opinion with internal counsel at PIMCO. In my capacity as Chief Legal
Officer of PAFM, I am rendering this opinion on behalf of PIMCO in connection
with the sale to you by PIMCO Corporate Opportunity Fund (the "Fund"), a
voluntary association with transferable shares organized and existing under and
by virtue of the laws of The Commonwealth of Massachusetts (commonly referred to
as a "Massachusetts business trust"), of 4,520 Auction Market Preferred Shares,
Series M, 4,520 Auction Market Preferred Shares, Series T, 4,520 Auction Market
Preferred Shares, Series W, 4,520 Auction Market Preferred Shares, Series TH and
4,520 Auction Market Preferred Shares, Series F, of the Fund (collectively, the
"AMPS"), pursuant to a registration statement on Form N-2 under the Securities
Act of 1933, as amended (the "Securities Act"), and the Investment Company Act
of 1940, as amended (the "Investment Company Act"), filed with the Securities
and Exchange Commission (the "Commission") on January 13, 2003 (Securities Act
File No. 333-102464, and Investment Company Act File No. 811-21238), as amended
by Pre-Effective Amendment No. 1 filed with the Commission on February ___, 2003
and Pre-Effective Amendment No. 2 filed with the Commission on February ___,
2003 (such registration statement, as amended, referred to herein as the
"Registration Statement"), and a purchase agreement dated February ___, 2003 by
and among you, the Fund and PAFM (the "Purchase Agreement").
A-10
February __, 2003
Page 2
This opinion is rendered to you pursuant to Section 5(b) of the Purchase
Agreement. Capitalized terms used herein without definition have the meanings
assigned to them in the Purchase Agreement.
As Chief Legal Officer of PAFM, 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 PAFM, as accepted and agreed to by the Fund,
dated as of November 19, 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 4 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
Chief Legal Officer of PAFM.
Subject to the foregoing and the other matters set forth herein, it is my
opinion that, as of the date hereof:
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 ss. 18-101,
et seq.) with all
A-11
February __, 2003
Page 3
necessary limited liability company 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 on certificates from public
officials, I confirm that PIMCO is qualified to do business in the following
States: California and New York, such States being those in which its ownership
or leasing of property or its conducting of business may require such
qualification and where failure to so qualify would have a material adverse
effect on the ability of PIMCO to perform its obligations under the Portfolio
Management Agreement.
2. The execution, delivery and performance of the Portfolio Management
Agreement by PIMCO have been duly authorized by all necessary limited liability
company 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 the 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 May 5, 2000,
(ii) violate any federal, Delaware or New York statute, rule or
regulation applicable to PIMCO (other than federal and state securities or
blue sky laws, the Investment Company Act and the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), 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 Securities Act, the Investment Company Act or the
Advisers Act.
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
A-12
February __, 2003
Page 4
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 dated
February __, 2003, relating to the AMPS (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-Portfolio Manager" 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 (with respect to
the Prospectus, 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 that might reasonably result in any material adverse change in
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
A-13
February __, 2003
Page 5
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 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; and (iii) the Portfolio
Management Agreement has been duly authorized, executed and delivered by such
parties other than PIMCO and, other than PIMCO, constitutes 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.
A-14
February __, 2003
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,
A-15
