EXHIBIT h.1
PIMCO Municipal Income Fund
Auction Preferred Shares
No Par Value
UNDERWRITING AGREEMENT
August 20, 2001
UNDERWRITING AGREEMENT
August 20, 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
PIMCO Municipal Income Fund, a voluntary association with transferable
shares organized and existing under and by virtue of the laws of The
Commonwealth of Massachusetts (commonly referred to as a Massachusetts business
trust) (the "Fund"), proposes to issue and sell to the underwriters named in
Schedule A annexed hereto (the "Underwriters") an aggregate of 1,600 preferred
shares of beneficial interest of the Fund, no par value, designated Auction
Preferred Shares, Series A, of the Fund, 1,600 preferred shares of beneficial
interest of the Fund, no par value, designated Auction Preferred Shares, Series
B, of the Fund, 1,600 preferred shares of beneficial interest of the Fund, no
par value, designated Auction Preferred Shares, Series C, of the Fund, 1,600
preferred shares of beneficial interest of the Fund, no par value, designated
Auction Preferred Shares, Series D, of the Fund, and 1,600 preferred shares of
beneficial interest of the Fund, no par value, designated Auction Preferred
Shares, Series E, of the Fund, each with a liquidation preference of $25,000 per
share (the "APS")
The Fund has filed with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations thereunder (collectively called the
"Act"), and with the provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder (collectively called the
"Investment Company Act"), a registration statement on Form N-2 (File Nos. 333-
64796 and 811-10377), including a prospectus and a statement of additional
information, relating to the APS. The Fund has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses
(including a preliminary statement of additional information) (each thereof,
including such preliminary statement of additional information, being herein
called a "Preliminary Prospectus") relating to the APS. Except where the
context otherwise requires, the registration statement, as amended when it
becomes effective (the "Effective Date"), including all documents filed as a
part thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 497 under the Act and deemed to be part of
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the registration statement at the time of effectiveness pursuant to Rule 430A
under the Act is herein called the Registration Statement, and the prospectus
(including the statement of additional information), in the form filed by the
Fund with the Commission pursuant to Rule 497 under the Act or, if no such
filing is required, the form of final prospectus (including the form of final
statement of additional information) included in the Registration Statement at
the time it became effective, is herein called the Prospectus. In addition, the
Fund has filed a Notification of Registration on Form N-8A (the "Notification")
pursuant to Section 8 of the Investment Company Act.
PIMCO Advisors L.P. ("PIMCO Advisors," or the "Investment Manager")
acts as the Fund's investment manager pursuant to an Investment Management
Agreement by and between the Fund and the Investment Manager, dated as of June
20, 2001 (the "Investment Management Agreement"). Pacific Investment Management
Company LLC ("PIMCO," or the "Portfolio Manager") acts as the Fund's portfolio
manager pursuant to a Portfolio Management Agreement by and between the
Investment Manager and PIMCO, as accepted and agreed to by the Fund, dated as of
June 20, 2001. State Street Bank & Trust Co. acts as the custodian (the
"Custodian") of the Fund's cash and portfolio assets pursuant to a Custodian
Agreement, dated as of June 20, 2001 (the "Custodian Agreement"). PFPC Inc.
acts as the Fund's transfer agent, registrar, shareholder servicing agent and
dividend disbursing agent with respect to the common shares of the Fund (the
"Transfer Agent") pursuant to a Transfer Agency Services Agreement, dated as of
June 20, 2001 (the "Transfer Agency Agreement"). Bankers Trust Company will act
as the Fund's auction agent (the "Auction Agent") for the APS pursuant to an
Auction Agency Agreement, dated as of August 23, 2001 (the "Auction Agency
Agreement"). The Fund has entered into a Letter Agreement, dated as of
August 23, 2001, with the Depository Trust Company (the "DTC Agreement").
The Fund, the Investment Manager and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Fund agrees to
sell to the respective Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase from the Fund the aggregate number of
APS set forth opposite the name of such Underwriter in Schedule A attached
hereto in each case at a purchase price per share of $24,750. The Fund is
advised that the Underwriters intend (i) to make a public offering of their
respective portions of the APS as soon after the effective date of the
Registration Statement as is advisable and (ii) initially to offer the APS
upon the terms set forth in the Prospectus. The Underwriters may from time
to time increase or decrease the public offering price after the initial
public offering to such extent as they may determine.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the APS shall be
made by the Underwriters to the Fund by Federal Funds wire transfer, against
delivery of the certificates for the APS to you through the facilities of
the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M.,
New York City time on the third business day following the date of this
Underwriting
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Agreement (unless another date or time shall be agreed to by you and the
Fund). The time at which such payment and delivery are actually made is
hereinafter sometimes called the "Time of Purchase" or the "Closing Date."
Certificates for the APS shall be delivered to you in definitive form in
such names and in such denominations as you shall specify on the second
business day preceding the Time of Purchase. For the purpose of expediting
the checking of the certificates for the APS by you, the Fund agrees to make
such certificates available to you for such purpose at least one full
business day preceding the Time of Purchase.
A certificate in definitive form representing the APS registered in
the name of Cede & Co., as nominee for DTC, shall be delivered by or on
behalf of the Fund to DTC for the account of the Underwriters.
3. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE INVESTMENT MANAGER. Each
of the Fund and the Investment Manager jointly and severally represents and
warrants to each Underwriter as follows:
(a) On (A) the Effective Date and the date on which the Prospectus is first
filed with the Commission pursuant to Rule 497(b) or (h) under the Act or a
certification is first filed with the Commission pursuant to Rule 497(j)
under the Act, as the case may be, (B) the date on which any post-effective
amendment to the Registration Statement (except any post-effective
amendment which is filed with the Commission after the later of (x) one
year from the date of this Underwriting Agreement or (y) the date on which
the distribution of the APS is completed) became or becomes effective or
any amendment or supplement to the Prospectus was or is filed with the
Commission and (C) the Closing Date, the Registration Statement, the
Prospectus and any such amendment or supplement thereto and the
Notification complied or will comply in all material respects with the
requirements of the Act and the Investment Company Act, as the case may be.
On the Effective Date and on the date that any post-effective amendment to
the Registration Statement (except any post-effective amendment which is
filed with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution of
the APS is completed) became or becomes effective, neither the Registration
Statement nor any such amendment did or will contain any untrue statement
of a material fact or omit to state a material fact required to be stated
in it or necessary to make the statements in it not misleading. On the
Effective Date, on the Closing Date, and, if applicable, on the date the
Prospectus or any amendment or supplement to the Prospectus was or is filed
with the Commission, the Prospectus did not or will not, as the case may
be, contain any untrue statement of a material fact or omit to state a
material fact required to be stated in it or necessary to make the
statements in it, in light of the circumstances under which they were made,
not misleading. The foregoing representations in this Section 3(a) do not
apply to statements or omissions relating to the Underwriters made in
reliance on and in conformity with information furnished in
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writing to the Fund by the Underwriters expressly for use in the
Registration Statement, the Prospectus, or any amendments or supplements
thereto, as described in Section 9(f) hereof.
(b) The Fund has been duly formed and is validly existing as an unincorporated
voluntary association under the laws of The Commonwealth of Massachusetts
(commonly known as a "Massachusetts business trust"), with full power and
authority to conduct all the activities conducted by it, to own or lease
all assets owned or leased by it and to conduct its business as described
in the Registration Statement and Prospectus, and the Fund is duly licensed
and qualified to do business and in good standing in each jurisdiction in
which its ownership or leasing of property or its conducting of business
requires such qualification, except where the failure to be so qualified or
be in good standing would not have a material adverse effect on the Fund,
and the Fund owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Prospectus. The Fund has no subsidiaries.
(c) The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The common shares of beneficial interest of
the Fund, no par value per share (the "Common Shares"), and the APS conform
in all material respects to the description of them in the Prospectus. All
outstanding Common Shares have been duly authorized and are validly issued,
fully paid and nonassessable (except as described in the Registration
Statement). The APS to be issued and delivered to and paid for by the
Underwriters in accordance with this Underwriting Agreement against payment
therefor as provided by this Underwriting Agreement have been duly
authorized and when issued and delivered to the Underwriters will have been
validly issued and will be fully paid and nonassessable (except as
described in the Registration Statement). No person is entitled to any
preemptive or other similar rights in connection with the issuance of the
APS.
(d) The Fund is duly registered with the Commission under the Investment
Company Act as a diversified, closed-end management investment company,
and, subject to the filing of any final amendment to the Registration
Statement (a "Final Amendment"), if not already filed, all action under the
Act and the Investment Company Act, as the case may be, necessary to make
the public offering and consummate the sale of the APS as provided in this
Underwriting Agreement has or will have been taken by the Fund.
(e) The Fund has, or at the relevant time had, full power and authority to
enter into each of this Underwriting Agreement, the Investment Management
Agreement, the Custodian Agreement, the Transfer Agency Agreement,
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the Auction Agency Agreement and the DTC Agreement (collectively, the "Fund
Agreements") and to perform all of the terms and provisions hereof and
thereof to be carried out by it and (i) each Fund Agreement has been duly
and validly authorized, executed and delivered by or on behalf of the Fund,
(ii) each Fund Agreement does not violate in any material respect any of
the applicable provisions of the Investment Company Act or the Investment
Advisers Act of 1940, as amended, and the rules and regulations thereunder
(collectively called the "Advisers Act"), as the case may be, and
(iii) assuming due authorization, execution and delivery by the other
parties thereto, each Fund Agreement constitutes the legal, valid and
binding obligation of the Fund enforceable in accordance with its terms,
(A) subject, as to enforcement, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (B) except as rights to indemnity thereunder may be
limited by federal or state securities laws.
(f) None of (i) the execution and delivery by the Fund of the Fund Agreements,
(ii) the issue and sale by the Fund of the APS as contemplated by this
Underwriting Agreement and (iii) the performance by the Fund of its
obligations under any of the Fund Agreements or consummation by the Fund of
the other transactions contemplated by the Fund Agreements conflicts with
or will conflict with, or results or will result in a breach of, the
Agreement and Declaration of Trust of the Fund, as amended through the date
hereof (the "Declaration of Trust"), and the Amended and Restated Bylaws of
the Fund, adopted in connection with the issuance of the APS and as amended
through the date hereof (the "Amended Bylaws"), or any agreement or
instrument to which the Fund is a party or by which the Fund is bound,
except where such violation does not have a material adverse effect on the
condition (financial or other), business prospects, properties, net assets
or results of operations of the Fund, or any law, rule or regulation, or
order of any court, governmental instrumentality, securities exchange or
association or arbitrator, whether foreign or domestic, applicable to the
Fund, other than state securities or "blue sky" laws applicable in
connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(g) The Fund is not currently in breach of, or in default under, any written
agreement or instrument to which it is a party or by which it or its
property is bound or affected, except where such violation does not have a
material adverse effect on the condition (financial or other), business
prospects, properties, net assets or results of operations of the Fund.
(h) No person has any right to the registration of any securities of the Fund
because of the filing of the Registration Statement.
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(i) No consent, approval, authorization or order of any court or governmental
agency or body or securities exchange or association, whether foreign or
domestic, is required by the Fund for the consummation by the Fund of the
transactions to be performed by the Fund or the performance by the Fund of
all the terms and provisions to be performed by or on behalf of it in each
case as contemplated in the Fund Agreements, except such as (i) have been
obtained under the Act, the Investment Company Act or the Advisers Act, and
(ii) may be required under state securities or "blue sky" laws, in
connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(j) To the knowledge of the Fund and the Investment Manager after due inquiry,
based on representations from PricewaterhouseCoopers LLP, whose report
appears in the Prospectus, PricewaterhouseCoopers LLP are independent
public accountants with respect to the Fund as required by the Act and the
Investment Company Act.
(k) The statement of assets and liabilities included in the Registration
Statement and the Prospectus presents fairly in all material respects, in
accordance with generally accepted accounting principles in the United
States applied on a consistent basis, the financial position of the Fund as
of the date indicated.
(l) The Fund will maintain a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets through an asset reconciliation procedure or otherwise at reasonable
intervals and appropriate action is taken with respect to any differences.
(m) Since the date as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (i) there
has been no material adverse change in the condition, financial or
otherwise, business affairs or business of the Fund, whether or not arising
in the ordinary course of business, (ii) there have been no transactions
entered into by the Fund other than those in the ordinary course of its
business and (iii) there has been no dividend or distribution of any kind
declared, paid or made on any class of its capital shares.
(n) There is no action, suit or proceeding before or by any court, commission,
regulatory body, administrative agency or other governmental agency or
body, foreign or domestic, now pending, or, to the knowledge of the Fund,
threatened against or affecting the Fund, which (i) might result in any
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material adverse change in the condition, financial or otherwise, business
affairs or business prospects of the Fund or might materially adversely
affect the properties or assets of the Fund or (ii) is of a character
required to be described in the Registration Statement or the Prospectus;
and there are no contracts, franchises or other documents that are of a
character required to be described in, or that are required to be filed as
exhibits to, the Registration Statement that have not been described or
filed as required.
(o) The Fund intends to direct the investment of the proceeds of the offering
of the APS in such a manner as to comply with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
(p) The Common Shares are listed on the New York Stock Exchange.
(q) The APS have been, or prior to the Closing Date will be, assigned a rating
of "Aaa" by Xxxxx'x Investors Service, Inc.
(r) No advertising, sales literature or other promotional materials (excluding
road show slides or road show tapes) were authorized or prepared by or on
behalf of the Fund, the Investment Manager or the Portfolio Manager or any
representative thereof for use in connection with the public offering or
sale of the APS (collectively referred to as the "Sales Materials"); any
road show slides or road show tapes complied and comply in all material
respects with the applicable requirements of the Act and the rules and
interpretations of the NASD; and no broker kits, road show slides, road
show tapes or sales materials authorized or prepared by the Fund or
authorized or prepared on behalf of the Fund by the Investment Manager, the
Portfolio Manager or any representative thereof for use in connection with
the public offering or sale of the APS contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT MANAGER. The Investment
Manager represents to each Underwriter and, in the case of paragraph
(f) also to the Fund, as follows:
(a) The Investment Manager has been duly formed, is validly existing as a
limited partnership under the laws of the State of Delaware with full power
and authority to conduct all of the activities conducted by it, to own or
lease all of the assets owned or leased by it and to conduct its business
as described in the Registration Statement and Prospectus, and the
Investment Manager is duly licensed and qualified to do business and in
good standing in each jurisdiction in which it is required to be so
qualified, except to the extent that failure to be so qualified or be in
good standing
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would not have a material adverse effect on the Investment Manager's
ability to provide services to the Fund; and the Investment Manager owns,
possesses or has obtained and currently maintains all governmental
licenses, permits, consents, orders, approvals and other authorizations,
whether foreign or domestic, necessary to carry on its business as
contemplated in the Registration Statement and the Prospectus.
(b) The Investment Manager is (i) duly registered as an investment adviser
under the Advisers Act and (ii) not prohibited by the Advisers Act or the
Investment Company Act from acting as the investment adviser for the Fund
as contemplated by the Investment Management Agreement, the Registration
Statement and the Prospectus.
(c) The Investment Manager has, or at the relevant time had, full power and
authority to enter into each of this Underwriting Agreement, the Investment
Management Agreement and the Portfolio Management Agreement (collectively,
this Underwriting Agreement, the Investment Management Agreement and the
Portfolio Management Agreement being referred to as the "Investment Manager
Agreements") and to carry out all the terms and provisions hereof and
thereof to be carried out by it; and each Investment Manager Agreement has
been duly and validly authorized, executed and delivered by the Investment
Manager; none of the Investment Manager Agreements violates in any material
respect any of the applicable provisions of the Investment Company Act or
the Advisers Act; and assuming due authorization, execution and delivery by
the other parties thereto, each Investment Manager Agreement constitutes a
legal, valid and binding obligation of the Investment Manager, enforceable
in accordance with its terms, (i) subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (ii) except
as rights to indemnity thereunder may be limited by federal or state
securities laws.
(d) Neither (i) the execution and delivery by the Investment Manager of any
Investment Manager Agreement nor (ii) the consummation by the Investment
Manager of the transactions contemplated by, or the performance of its
obligations under, any Investment Manager Agreement conflicts or will
conflict with, or results or will result in a breach of, the limited
partnership agreement or other organizational documents of the Investment
Manager or any agreement or instrument to which the Investment Manager is a
party or by which the Investment Manager is bound, or any law, rule or
regulation, or order of any court, governmental instrumentality, securities
exchange or association or arbitrator, whether foreign or domestic,
applicable to the Investment Manager.
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(e) No consent, approval, authorization or order of any court, governmental
agency or body or securities exchange or association, whether foreign or
domestic, is required for the consummation of the transactions contemplated
in, or the performance by the Investment Manager of its obligations under,
any Investment Manager Agreement, as the case may be, except such as
(i) have been obtained under the Act, the Investment Company Act or the
Advisers Act, and (ii) may be required by the New York Stock Exchange or
under state securities or "blue sky" laws, in connection with the purchase
and distribution of the APS by the Underwriters pursuant to this
Underwriting Agreement.
(f) The description of the Investment Manager and its business, and the
statements attributable to the Investment Manager, in the Registration
Statement and the Prospectus comply with the requirements of the Act and
the Investment Company Act and do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
(g) There is no action, suit or proceeding before or by any court, commission,
regulatory body, administrative agency or other governmental agency or
body, foreign or domestic, now pending or, to the knowledge of the
Investment Manager, threatened against or affecting the Investment Manager
of a nature required to be disclosed in the Registration Statement or
Prospectus or that might reasonably be expected to result in any material
adverse change in the ability of the Investment Manager to fulfill its
respective obligations under any Investment Manager Agreement.
(h) None of the Fund, the Investment Manager or the Portfolio Manager has made
available any promotional materials intended for use only by qualified
broker-dealers and registered representatives thereof by means of an
Internet web site or similar electronic means.
(i) The Portfolio Manager has been duly formed, is validly existing as a
limited liability company under the laws of Delaware with full power and
authority to conduct all of the activities conducted by it, to own or lease
all of the assets owned or leased by it and to conduct its business as
described in the Registration Statement and Prospectus, and the Portfolio
Manager is duly licensed and qualified to do business and in good standing
in each jurisdiction in which it is required to be so qualified, except to
the extent that failure to be so qualified or be in good standing would not
have a material adverse affect on the Portfolio Manager's ability to
provide services to the Fund; and the Portfolio Manager owns, possesses or
has obtained and currently maintains all governmental licenses, permits,
consents, orders, approvals and other authorizations, whether foreign or
domestic, necessary to carry on its business as contemplated in the
Registration Statement and the Prospectus.
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(j) The Portfolio Manager is (i) duly registered as an investment adviser under
the Advisers Act and (ii) not prohibited by the Advisers Act or the
Investment Company Act from acting as the investment sub-adviser for the
Fund as contemplated by the Portfolio Management Agreement, the
Registration Statement and the Prospectus.
(k) The Portfolio Manager has, or at the relevant time had, full power and
authority to enter into each of this Underwriting Agreement and the
Portfolio Management Agreement (collectively, this Underwriting Agreement
and the Portfolio Management Agreement being referred to as the "Portfolio
Manager Agreements") and to carry out all the terms and provisions hereof
and thereof to be carried out by it; and each Portfolio Manager Agreement
has been duly and validly authorized, executed and delivered by the
Portfolio Manager; none of the Portfolio Manager Agreements violates in any
material respect any of the applicable provisions of the Investment Company
Act or the Advisers Act; and assuming due authorization, execution and
delivery by the other parties thereto, each Portfolio Manager Agreement
constitutes a legal, valid and binding obligation of the Portfolio Manager,
enforceable in accordance with its terms, (i) subject, as to enforcement,
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (ii) except
as rights to indemnity thereunder may be limited by federal or state
securities laws.
(l) Neither (i) the execution and delivery by the Portfolio Manager of any
Portfolio Manager Agreement nor (ii) the consummation by the Portfolio
Manager of the transactions contemplated by, or the performance of its
obligations under, any Portfolio Manager Agreement conflicts or will
conflict with, or results or will result in a breach of, the limited
liability company agreement or other organizational documents of the
Portfolio Manager or any agreement or instrument to which the Portfolio
Manager is a party or by which the Portfolio Manager is bound, or any law,
rule or regulation, or order of any court, governmental instrumentality,
securities exchange or association or arbitrator, whether foreign or
domestic, applicable to the Portfolio Manager.
(m) No consent, approval, authorization or order of any court, governmental
agency or body or securities exchange or association, whether foreign or
domestic, is required for the consummation of the transactions contemplated
in, or the performance by the Portfolio Manager of its obligations under,
any Portfolio Manager Agreement, as the case may be, except such as
(i) have been obtained under the Act, the Investment Company Act or the
Advisers Act, and (ii) may be required by the New York Stock Exchange or
under state securities or "blue sky" laws, in connection with the purchase
and distribution of the APS by the Underwriters pursuant to this
Underwriting Agreement.
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(n) The description of the Portfolio Manager and its business, and the
statements attributable to the Portfolio Manager, in the Registration
Statement and the Prospectus comply with the requirements of the Act and
the Investment Company Act and do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading.
(o) There is no action, suit or proceeding before or by any court, commission,
regulatory body, administrative agency or other governmental agency or
body, foreign or domestic, now pending or, to the knowledge of the
Portfolio Manager, threatened against or affecting the Portfolio Manager of
a nature required to be disclosed in the Registration Statement or
Prospectus or that might reasonably be expected to result in any material
adverse change in the ability of the Portfolio Manager to fulfill its
respective obligations under any Portfolio Manager Agreement.
5. AGREEMENTS OF THE PARTIES.
(a) If the registration statement relating to the APS has not yet become
effective, the Fund will promptly file any Final Amendment, if not
previously filed, with the Commission, and will use its best efforts to
cause such registration statement to become effective and, as soon as the
Fund is advised, will advise UBS Warburg LLC (the "Managing
Representative") when the Registration Statement or any amendment thereto
has become effective. If the Registration Statement has become effective
and the Prospectus contained therein omits certain information at the time
of effectiveness pursuant to Rule 430A under the Act, the Fund will file a
430A prospectus pursuant to Rule 497(h) under the Act as promptly as
practicable, but no later than the second business day following the
earlier of the date of the determination of the offering price of the APS
or the date the Prospectus is first used after the Effective Date. If the
Registration Statement has become effective and the Prospectus contained
therein does not so omit such information, the Fund will file a prospectus
pursuant to Rule 497(b) or a certification pursuant to Rule 497(j) under
the Act as promptly as practicable, but no later than the fifth business
day following the date of the later of the Effective Date or the
commencement of the public offering of the APS after the Effective Date.
In either case, the Fund will provide you satisfactory evidence of the
filing. The Fund will not file with the Commission any Prospectus or any
other amendment (except any post-effective amendment which is filed with
the Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which distribution of the APS is
completed) or supplement to the Registration Statement or the Prospectus
unless a copy has first been submitted to the Managing Representative a
reasonable time before its filing and the Managing Representative has not
objected to it in writing within a reasonable time after receiving the
copy.
(b) For the period of three years from the date hereof, the Fund will advise
the Managing Representative promptly (1) of the issuance by the Commission
of any order in respect of the Fund, the Investment Manager or the
Portfolio Manager which relates to the Fund, or which relates to any
material arrangements or proposed material arrangements involving the Fund,
the Investment Manager or the Portfolio Manager, (2) of the initiation or
threatening of any proceedings for, or receipt by the Fund of any notice
with respect to, any suspension of the qualification of the APS for sale in
any jurisdiction or the issuance of any order by the Commission suspending
the effectiveness of the Registration Statement, (3) of receipt by the
Fund, or any representative or attorney of the Fund, of any other
communication from the Commission relating in any material way to the Fund,
the Registration Statement, the Notification, any Preliminary Prospectus,
the Prospectus or to the transactions contemplated by this Underwriting
Agreement and (4) of the issuance by any court, regulatory body,
administrative agency or other governmental agency or body, whether foreign
or domestic, of any order, ruling or decree, or the threat to initiate any
proceedings with respect thereto, regarding the Fund, which relates in any
material way to the Fund or any material arrangements or proposed material
arrangements involving the Fund. The Fund will make every reasonable
effort to prevent the issuance of any order suspending the effectiveness of
the Registration Statement and, if any such order is issued, to obtain its
lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting Agreement, the Fund
will deliver to the Managing Representative, without charge, a signed copy
of the Registration Statement and the Notification and of any amendments
(except any post-effective amendment which is filed with the Commission
after the later of (x) one year from the date of this Underwriting
Agreement or (y) the date on which the distribution of the APS is
completed) to either the Registration Statement or the Notification
(including all exhibits filed with any such document) and as many conformed
copies of the Registration Statement and any amendments thereto (except any
post-effective amendment which is filed with the Commission after the later
of (x) one year from the date of this Underwriting Agreement or (y) the
date on which the distribution of the APS is completed) (excluding
exhibits) as the Managing Representative may reasonably request.
(d) During such period as a prospectus is required by law to be delivered by an
underwriter or a dealer, the Fund will deliver, without charge, to you, the
Underwriters and any dealers, at such office or offices as you may
designate, as many copies of the Prospectus as you may reasonably request,
and, if any event occurs during such period as a result of which it is
12
necessary to amend or supplement the Prospectus, in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading in any material respect, or if during such period it
is necessary to amend or supplement the Prospectus to comply with the Act
or the Investment Company Act, the Fund promptly will prepare, submit to
the Managing Representative, file with the Commission and deliver, without
charge, to the Underwriters and to dealers (whose names and addresses the
Managing Representative will furnish to the Fund) to whom APS may have been
sold by the Underwriters, and to other dealers on request, amendments or
supplements to the Prospectus so that the statements in such Prospectus, as
so amended or supplemented, will not, in light of the circumstances under
which they were made, be misleading in any material respect and will comply
with the Act and the Investment Company Act; provided that if the amendment
or supplement is required exclusively as a result of a misstatement in or
omission from the information provided to the Fund in writing by the
Underwriters expressly for use in the Prospectus, the Fund may deliver such
amendment or supplement to the Underwriters and dealers at a reasonable
charge not to exceed the actual cost thereof to the Fund. Delivery by the
Underwriters of any such amendments or supplements to the Prospectus will
not constitute a waiver of any of the conditions in Section 6 hereof.
(e) The Fund will make generally available to holders of the Fund's securities,
as soon as practicable but in no event later than the last day of the 18th
full calendar month following the calendar quarter in which the Effective
Date falls, an earnings statement, if applicable, satisfying the provisions
of the last paragraph of Section 11(a) of the Act and, at the option of the
Fund, Rule 158 under the Act.
(f) The Fund will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Fund's counsel and accountants in
connection with the registration of the APS and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or reproducing this
Underwriting Agreement and any other documents in connection with the
offering, purchase, sale and delivery of the APS (including advertising
expenses of the Underwriters, if any); (iii) the cost of preparing share
certificates; (iv) the expenses (including, but not limited to, travel,
hotels and other accommodations) incurred by the Fund's directors,
officers, employees and other personnel in connection with meetings held
with registered brokers in connection with the offering of the APS, the
preparing to market and the marketing of the APS; (v) any fees charged by
securities rating services for rating the APS; (vi) the fees and expenses
of the DTC and its nominee, the Custodian and the Auction Agent; and
(vii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for.
It is understood, however, that, except as provided in this Section 5 and
Section 7 hereof, the Underwriters will pay all of their own costs and
13
expenses, including the fees of their counsel and stock transfer taxes, if
any, on resale of any of the APS by them, except any advertising expenses
connected with any offers they may make.
(g) If the transactions contemplated by this Underwriting Agreement are not
consummated, except as otherwise provided herein, no party will be under
any liability to any other party, except that (i) if this Underwriting
Agreement is terminated by (A) the Fund or the Investment Manager pursuant
to any of the provisions hereof or (B) by you or the Underwriters because
of any inability, failure or refusal on the part of the Fund or the
Investment Manager to comply with any material terms or because any of the
conditions in Section 6 are not satisfied, the Investment Manager or an
affiliate and the Fund, jointly and severally, will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees,
disbursements and other charges of their counsel) reasonably incurred by
them in connection with the proposed purchase and sale of the APS and
(ii) no Underwriter who has failed or refused to purchase the APS agreed to
be purchased by it under this Underwriting Agreement, in breach of its
obligations pursuant to this Underwriting Agreement, will be relieved of
liability to the Fund, the Investment Manager and the other Underwriters
for damages occasioned by its default.
(h) Without the prior written consent of the Managing Representative, the Fund
will not offer, sell or register with the Commission, or announce an
offering of, any equity securities of the Fund, within 180 days after the
Effective Date, except for the APS as described in the Prospectus and any
issuance of Common Shares pursuant to the dividend reinvestment plan
established by the Fund.
(i) The Fund will direct the investment of the net proceeds of the offering of
the APS in such a manner as to comply with the investment objective and
policies of the Fund as described in the Prospectus.
(j) No later than the Closing Date, the Underwriters will provide, and will
cause any selling group member to whom they have sold APS to provide, the
Auction Agent with a list of the record names of the persons to whom they
have sold APS, the number of APS sold to each such person, and the number
of APS they are holding as of the Closing Date; provided that in lieu of
thereof, an Underwriter may provide the Auction Agent with a list
indicating itself as the sole holder of all the APS sold by such
Underwriter.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the APS are subject to the accuracy on the date of
this Underwriting Agreement, and on the Closing Date, of the representations
of the Fund and the Investment Manager in this Underwriting Agreement, to
the accuracy and completeness of all material statements made by the Fund
and the Investment Manager or any of their respective officers in any
certificate delivered
14
to the Managing Representative or its counsel pursuant to this Underwriting
Agreement, to performance by the Fund and the Investment Manager of their
respective obligations under this Underwriting Agreement and to each of the
following additional conditions:
(a) The Registration Statement must have become effective by 5:30 p.m.,
New York City time, on the date of this Underwriting Agreement or such
later date and time as the Managing Representative consents to in writing.
The Prospectus must have been filed in accordance with Rule 497(b) or
(h) or a certificate must have been filed in accordance with Rule 497(j),
as the case may be, under the Act.
(b) No order suspending the effectiveness of the Registration Statement may be
in effect and no proceedings for such purpose may be pending before or, to
the knowledge of counsel to the Underwriters, threatened by the Commission,
and any requests for additional information on the part of the Commission
(to be included in the Registration Statement or the Prospectus or
otherwise) must be complied with or waived to the reasonable satisfaction
of the Managing Representative.
(c) Since the dates as of which information is given in the Registration
Statement and the Prospectus, (i) there must not have been any material
change in the Common Shares, the APS or the liabilities of the Fund except
as set forth in or contemplated by the Prospectus; (ii) there must not have
been any material adverse change in the general affairs, prospects,
management, business, financial condition or results of operations of the
Fund, the Investment Manager or the Portfolio Manager whether or not
arising from transactions in the ordinary course of business as set forth
in or contemplated by the Prospectus which in the opinion of the Managing
Representative would materially adversely affect the market for the APS;
(iii) the Fund must not have sustained any material loss or interference
with its business from any court or from legislative or other governmental
action, order or decree, whether foreign or domestic, or from any other
occurrence not described in the Registration Statement and Prospectus; and
(iv) there must not have occurred any event that makes untrue or incorrect
in any material respect any statement or information contained in the
Registration Statement or Prospectus or that is not reflected in the
Registration Statement or Prospectus but should be reflected therein in
order to make the statements or information therein (in the case of the
Prospectus, in light of the circumstances in which they were made) not
misleading in any material respect.
(d) The Managing Representative must have received on the Closing Date a
certificate, dated such date, of the President, a Vice President or
Managing Director and the chief financial or accounting officer of each of
the Fund and the Investment Manager certifying that (i) the signers have
carefully examined the Registration Statement, the Prospectus, and this
15
Underwriting Agreement, (ii) the representations of the Fund (with respect
to the certificates from such Fund officers) and the representations of the
Investment Manager (with respect to the certificates from such officers of
the Investment Manager) in this Underwriting Agreement are accurate on and
as of the date of the certificate, (iii) there has not been any material
adverse change in the general affairs, prospects, management, business,
financial condition or results of operations of the Fund (with respect to
the certificates from such Fund officers) or the Investment Manager (with
respect to the certificates from such officers of the Investment Manager),
which change would materially and adversely affect the ability of the Fund
or the Investment Manager, as the case may be, to fulfill its obligations
under this Underwriting Agreement or the Investment Management Agreement,
whether or not arising from transactions in the ordinary course of
business, (iv) with respect to the Fund only, to the knowledge of such
officers after reasonable investigation, no order suspending the
effectiveness of the Registration Statement, prohibiting the sale of any of
the APS or otherwise having a material adverse effect on the Fund has been
issued and no proceedings for any such purpose are pending before or
threatened by the Commission or any other regulatory body, whether foreign
or domestic, (v) to the knowledge of the officers of the Investment
Manager, after reasonable investigation, no order having a material adverse
effect on the ability of the Investment Manager to fulfill its obligations
under this Underwriting Agreement or the Investment Management Agreement,
as the case may be, has been issued and no proceedings for any such purpose
are pending before or threatened by the Commission or any other regulatory
body, whether foreign or domestic, and (vi) each of the Fund (with respect
to the certificates from such Fund officers) and the Investment Manager
(with respect to the certificates from such officers of the Investment
Manager) has performed all of its respective agreements that this
Underwriting Agreement requires it to perform by the Closing Date (to the
extent not waived in writing by the Managing Representative).
(e) You must have received on the Closing Date the opinions dated the Closing
Date substantially in the form of Schedules B, C, D and E and this
Underwriting Agreement from the counsel identified in each such Schedule,
or in such other form as is acceptable to counsel for the Underwriters.
(f) You must have received on the Closing Date from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP and its affiliated entities an opinion dated the Closing
Date with respect to the Fund, the APS, the Registration Statement and the
Prospectus, this Underwriting Agreement and the form and sufficiency of all
proceedings taken in connection with the sale and delivery of the APS.
Such opinion and proceedings shall fulfill the requirements of this Section
6(f) only if such opinion and proceedings are satisfactory in all respects
to the Managing Representative. The Fund, the
16
Investment Manager and the Portfolio Manager must have furnished to such
counsel such documents as counsel may reasonably request for the purpose of
enabling them to render such opinion.
(g) The Managing Representative must have received on the date this
Underwriting Agreement is signed and delivered by you a signed letter,
dated such date, substantially in the form of Schedule F to this
Underwriting Agreement from the firm of accountants designated in such
Schedule. The Managing Representative also must have received on the
Closing Date a signed letter from such accountants, dated as of the Closing
Date, confirming on the basis of a review in accordance with the procedures
set forth in their earlier letter that nothing has come to their attention
during the period from a date not more than five business days before the
date of this Underwriting Agreement, specified in the letter, to a date not
more than five business days before the Closing Date, that would require
any change in their letter referred to in the foregoing sentence.
(h) The APS shall have been accorded a rating of "aaa" by Xxxxx'x Investors
Service, Inc. and a letter to such effect, dated on or before the Closing
Date, shall have been delivered to the Managing Representative.
(i) As of the Closing Date, and assuming the receipt of the net proceeds from
the sale of the APS, the 1940 Act APS Asset Coverage and the APS Basic
Maintenance Amount (each as defined in the Prospectus) each will be met.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement will comply only if they are in
form and scope reasonably satisfactory to counsel for the Underwriters,
provided that any such documents, forms of which are annexed hereto, shall
be deemed satisfactory to such counsel if substantially in such form.
7. TERMINATION. This Underwriting Agreement may be terminated by the Managing
Representative by notifying the Fund at any time:
(a) before the later of the effectiveness of the Registration Statement and the
time when any of the APS are first generally offered pursuant to this
Underwriting Agreement by the Managing Representative to dealers by letter
or telegram;
(b) at or before the Closing Date if, in the sole judgment of the Managing
Representative, payment for and delivery of any APS is rendered
impracticable or inadvisable because (i) trading in the APS or the Common
Shares of the Fund is suspended by the Commission or the principal exchange
that lists the Common Shares, (ii) trading in securities generally on the
New York Stock Exchange or the Nasdaq Stock Market shall have been
suspended or limited or minimum or maximum prices shall have been generally
established on such exchange or over-the-
17
counter market, (iii) additional material governmental restrictions, not in
force on the date of this Underwriting Agreement, have been imposed upon
trading in securities or trading has been suspended on any U.S. securities
exchange, (iv) a general banking moratorium has been established by U.S.
federal or New York authorities or (v) any material adverse change in the
financial or securities markets in the United States or in political,
financial or economic conditions in the United States or any outbreak or
material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred
the effect of any of which is such as to make it, in the sole judgment of
the Managing Representative, impracticable or inadvisable to market the APS
on the terms and in the manner contemplated by the Prospectus; or
(c) at or before the Closing Date, if any of the conditions specified in
Section 6 have not been fulfilled when and as required by this Underwriting
Agreement.
8. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on the Closing Date the APS agreed to be
purchased on the Closing Date by such Underwriter or Underwriters, the
Managing Representative may find one or more substitute underwriters to
purchase such APS or make such other arrangements as the Managing
Representative deems advisable, or one or more of the remaining Underwriters
may agree to purchase such APS in such proportions as may be approved by the
Managing Representative, in each case upon the terms set forth in this
Underwriting Agreement. If no such arrangements have been made within
36 hours after the Closing Date, and
(a) the number of APS to be purchased by the defaulting Underwriters on the
Closing Date does not exceed 10% of the APS that the Underwriters are
obligated to purchase on such Closing Date, each of the nondefaulting
Underwriters will be obligated to purchase such APS on the terms set forth
in this Underwriting Agreement in proportion to their respective
obligations under this Underwriting Agreement, or
(b) the number of APS to be purchased by the defaulting Underwriters on the
Closing Date exceeds 10% of the APS to be purchased by all the Underwriters
on the Closing Date, the Fund will be entitled to an additional period of
24 hours within which to find one or more substitute underwriters
reasonably satisfactory to the Managing Representative to purchase such APS
on the terms set forth in this Underwriting Agreement.
Upon the occurrence of the circumstances described in the foregoing
paragraph (b), either the Managing Representative or the Fund will have the
right to postpone the Closing Date for not more than five business days in
order that
18
necessary changes and arrangements (including any necessary amendments or
supplements to the Registration Statement or the Prospectus) may be
effected by the Managing Representative and the Fund. If the number of APS
to be purchased on the Closing Date by such defaulting Underwriter or
Underwriters exceeds 10% of the APS that the Underwriters are obligated to
purchase on the Closing Date, and none of the nondefaulting Underwriters or
the Fund makes arrangements pursuant to this Section within the period
stated for the purchase of the APS that the defaulting Underwriters agreed
to purchase, this Underwriting Agreement will terminate without liability
on the part of any nondefaulting Underwriter, the Fund, the Investment
Manager or the Portfolio Manager, except as provided in Sections 5(g) and
9 hereof. Any action taken under this Section will not affect the liability
of any defaulting Underwriter to the Fund or to the nondefaulting
Underwriters arising out of such default. A substitute underwriter will
become an Underwriter for all purposes of this Underwriting Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) Each of the Fund and the Investment Manager, jointly and severally, agrees
to indemnify, defend and hold harmless each Underwriter, its partners,
directors and officers, and any person who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Act, the Exchange Act, the Investment
Company Act, the Advisers Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Fund) or in a
Prospectus (the term "Prospectus" for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, any Sales Materials, the
Prospectus and the Prospectus as amended or supplemented by the Fund), or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in either such Registration Statement
or Prospectus or necessary to make the statements made therein (with
respect to the Prospectus, in light of the circumstances under which they
were made) not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of any
Underwriter to the Fund, the Investment Manager or the Portfolio Manager
expressly for use with reference to any Underwriter in such Registration
Statement or such Prospectus or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such
19
information (with respect to the Prospectus, in light of the circumstances
under which they were made) not misleading, provided, however, that the
indemnity agreement contained in this subsection (a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such loss, damage,
expense, liability or claim purchased the APS which is the subject thereof
if the Prospectus corrected any such alleged untrue statement or omission
and if such Underwriter failed to send or give a copy of the Prospectus to
such person at or prior to the written confirmation of the sale of such APS
to such person, unless the failure is the result of noncompliance by the
Fund with Section 5(d) hereof.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Fund or the Investment Manager pursuant
to the foregoing paragraph, such Underwriter or such person shall promptly
notify the Fund and the Investment Manager in writing of the institution of
such Proceeding and the Fund or the Investment Manager shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify the Fund or the
Investment Manager shall not relieve the Fund or the Investment Manager
from any liability which the Fund or the Investment Manager may have to any
Underwriter or any such person or otherwise. Such Underwriter or such
person shall have the right to employ its or their own counsel in any such
case, but the reasonable fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Fund or the Investment
Manager, as the case may be, in connection with the defense of such
Proceeding or the Fund or the Investment Manager shall not have, within a
reasonable period of time in light of the circumstances, employed counsel
to have charge of the defense of such Proceeding or such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in
conflict with those available to the Fund or the Investment Manager (in
which case neither the Fund nor the Investment Manager shall have the right
to direct the defense of such Proceeding on behalf of the indemnified party
or parties, but the Fund or the Investment Manager, as the case may be, may
employ counsel and participate in the defense thereof at the expense of the
Fund or the Investment Manager, as the case may be), in any of which events
such reasonable fees and expenses shall be borne by the Fund or the
Investment Manager and paid as incurred (it being understood, however, that
the Fund or the Investment Manager shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in any
one Proceeding or series of related Proceedings in the same jurisdiction
20
representing the indemnified parties who are parties to such Proceeding).
Neither the Fund nor the Investment Manager shall be liable for any
settlement of any Proceeding effected without its written consent but if
settled with the written consent of the Fund or the Investment Manager, the
Fund or the Investment Manager, as the case may be, agrees to indemnify and
hold harmless any Underwriter and any such person from and against any loss
or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for
any settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at
least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened Proceeding in respect of
which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and
does not include an admission of fault, culpability or a failure to act, by
or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless
the Fund and the Investment Manager, and each of their respective
shareholders, partners, managers, members, trustees, directors and
officers, and any person who controls the Fund or the Investment Manager
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, and the successors and assigns of all of the foregoing persons from
and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Fund or
the Investment Manager or any such person may incur under the Act, the
Exchange Act, the Investment Company Act, the Advisers Act, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter to the
Fund or the Investment Manager expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Fund) or in a
Prospectus, or arises out of or is based upon any omission or
21
alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading (with
respect to the Prospectus, in light of the circumstances under which they
were made).
If any Proceeding is brought against the Fund, the Investment Manager
or any such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Fund, the Investment
Manager or such person shall promptly notify such Underwriter in writing of
the institution of such Proceeding and such Underwriter shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify such
Underwriter shall not relieve such Underwriter from any liability which
such Underwriter may have to the Fund, the Investment Manager or any such
person or otherwise. The Fund, the Investment Manager or such person shall
have the right to employ its or their own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of the Fund, the
Investment Manager or such person, as the case may be, unless the
employment of such counsel shall have been authorized in writing by such
Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties, but such Underwriter may employ counsel and participate in the
defense thereof at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as
incurred (it being understood, however, that such Underwriter shall not be
liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings
in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). No Underwriter shall be liable for any
22
settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the
Fund, the Investment Manager and any such person from and against any loss
or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then
the indemnifying party agrees that it shall be liable for any settlement of
any Proceeding effected without its written consent if (i) such settlement
is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days' prior
notice of its intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not include
an admission of fault, culpability or a failure to act, by or on behalf of
such indemnified party.
(c) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 9 in
respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect
the relative benefits received by the Fund and the Investment Manager on
the one hand and the Underwriters on the other hand from the offering of
the APS or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Fund and the Investment Manager on the one
hand and of the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, damages, expenses, liabilities
or claims, as well as any other relevant equitable considerations. The
relative benefits received by the Fund and the Investment Manager on the
one hand and the Underwriters on the other shall be deemed to be in the
same respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Fund and the total underwriting discounts and commissions
received by the Underwriters, bear to the aggregate public offering price
of the APS. The relative fault of the Fund and the Investment Manager on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates
to information supplied by the Fund or the Investment Manager or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
23
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Fund, the Investment Manager and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection
(c) above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
fees and commissions received by such Underwriter. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9 and
the covenants, warranties and representations of the Fund contained in this
Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its partners,
directors or officers or any person (including each partner, officer or
director of such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf
of the Fund or the Investment Manager, its shareholders, partners,
managers, members, trustees, directors or officers or any person who
controls the Fund or the Investment Manager within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the APS. The
Fund and the Investment Manager and each Underwriter agree promptly to
notify each other of the commencement of any Proceeding against it and, in
the case of the Fund or the Investment Manager, against any of the Fund's
or the Investment Manager's shareholders, partners, managers, members,
trustees, directors or officers in connection with the issuance and sale of
the APS, or in connection with the Registration Statement or Prospectus.
(f) The Fund and the Investment Manager each acknowledge that the statements
with respect to (1) the public offering of the APS as set forth on the
cover page of, and (2) selling concessions and reallowances of selling
concessions under the caption "Underwriting" in, the Prospectus constitute
the only information furnished in writing to the Fund by the Underwriters
expressly for use in such document. The Underwriters severally confirm
that these statements are correct in all material respects and were so
furnished by or on behalf of the Underwriters severally for use in the
Prospectus.
24
(g) Notwithstanding any other provisions in this Section 9, no party shall be
entitled to indemnification or contribution under this Underwriting
Agreement against any loss, claim, liability, expense or damage arising by
reason of such person's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties in the performance of its duties
hereunder.
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Fund or the Investment Manager, shall
be sufficient in all respects if delivered or sent to the Fund or the
Investment Manager, as the case may be, at the offices of the Fund or the
Investment Manager at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of
New York. The Section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and
the Fund and UBS Warburg LLC each consent to the jurisdiction of such
courts and personal service with respect thereto. The Fund and UBS Warburg
hereby consent to personal jurisdiction, service and venue in any court in
which any Claim arising out of or in any way relating to this Agreement is
brought by any third party against UBS Warburg LLC or any indemnified
party. Each of UBS Warburg LLC, the Fund (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates)
and the Investment Manager (on its behalf and, to the extent permitted by
applicable law, on behalf of its unitholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. Each of the Fund and the Investment Manager
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the Fund and
the Investment Manager, as the case may be, and may be enforced in any
other courts in the jurisdiction of which the Fund or the Investment
Manager, as the case may be, is or may be subject, by suit upon such
judgment.
25
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Fund and the Investment
Manager and to the extent provided in Section 9 hereof the controlling
persons, shareholders, partners, members, trustees, managers, directors and
officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators.
No other person, partnership, association or corporation (including a
purchaser, as such purchaser, from any of the Underwriters) shall acquire
or have any right under or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, the Fund and the Investment Manager, and any successor or
assign of any substantial portion of the Fund's, the Investment Manager's,
or any of the Underwriters' respective businesses and/or assets.
16. DISCLAIMER OF LIABILITY OF TRUSTEES AND BENEFICIARIES. A copy of the
Declaration of Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice hereby is given that this
Underwriting Agreement is executed on behalf of the Fund by an officer or
Trustee of the Fund in his or her capacity as an officer or Trustee of the
Fund and not individually and that the obligations under or arising out of
this Underwriting Agreement are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets
and properties of the Fund.
26
If the foregoing correctly sets forth the understanding among the Fund, the
Investment Manager and the Underwriters, please so indicate in the space
provided below, whereupon this letter and your acceptance shall constitute a
binding agreement among the Fund, the Investment Manager and the Underwriters,
severally.
Very truly yours,
PIMCO MUNICIPAL INCOME FUND
__________________________
By:
Title:
PIMCO ADVISORS L.P.
__________________________
By:
Title:
Accepted and agreed to as of the
date first above written, on
behalf of themselves and
the other several Underwriters
named in Schedule A
UBS WARBURG LLC
X.X. XXXXXXX & SONS, INC.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By: UBS WARBURG LLC
__________________________
By: Xxxxx Xxxxxxxx
Title: Managing Director
__________________________
By: Xxxx X. Reit
Title: Executive Director
27
SCHEDULE A
Number of Shares
Name to be Purchased
---- ---------------
UBS Warburg
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Total
SCHEDULE B
FORM OF OPINION OF
ROPES & XXXX REGARDING THE FUND
August , 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
We have acted as counsel to PIMCO Municipal Income Fund (the "Fund") in
connection with the proposed issuance 1,600 Auction Preferred Shares, Series A,
1,600 Auction Preferred Shares, Series B, 1,600 Auction Preferred Shares,
Series C, 1,600 Auction Preferred Shares, Series D, and 1,600 Auction Preferred
Shares, Series E (together, the "Preferred Shares"). This opinion is furnished
to you pursuant to Section 6(e) of the Underwriting Agreement dated as of
August , 2001 (the "Underwriting Agreement") among the Fund, PIMCO Advisors L.P.
(the "Investment Manager") and UBS Warburg LLC, X.X. Xxxxxxx & Sons, Inc. and
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as representatives of the
underwriters listed on Schedule A thereto (the "Underwriters"). Capitalized
terms used in this opinion, unless otherwise defined, have the meanings
specified in the Underwriting Agreement.
We have examined signed copies of the registration statement of the Fund on
Form N-2 (File No. 333-64796) under the Securities Act of 1933, as amended (the
"Securities Act") (which also constitutes Amendment No. 5 to the Fund's
Registration Statement on Form N-2 (File No. 811-10377) 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 July 9, 2001 (the "Original Registration Statement"), Pre-
Effective Amendment No. 1 to the Original Registration Statement, including all
exhibits thereto, as filed with the Commission on August 14, 2001 ("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 August , 2001 ("Pre-Effective Amendment No. 2," and together
with Pre-Effective Amendment No. 1 and the Original Registration Statement, the
"Registration Statement"); the Fund's Agreement and Declaration of Trust, as
amended to the date hereof (the "Declaration of Trust"), on file in the offices
of the Secretary of
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State of The Commonwealth of Massachusetts and the Clerk of the City of Boston;
the Amended and Restated Bylaws of the Fund, as amended to the date hereof (the
"Amended Bylaws"); a copy of the Prospectus dated August , 2001, relating to the
Preferred Shares and the Statement of Additional Information of the Fund dated
August , 2001, each as filed with the Commission pursuant to Rule 497 under the
Securities Act on August , 2001 (together, the "Prospectus"); the Investment
Management Agreement dated as of June 20, 2001, between the Fund and the
Investment Manager (the "Investment Management Agreement"); the Portfolio
Management Agreement dated as of June 20, 2001, between Pacific Investment
Management Company LLC (the "Portfolio Manager") and the Investment Manager (the
"Portfolio Management Agreement"), as agreed to and accepted by the Fund; the
Custodian Agreement dated as of June 29, 2001, between the Fund and State Street
Bank and Trust Company (the "Custodian Agreement"); the Auction Agency Agreement
dated as of August , 2001, as supplemented by the acceptance letter dated as of
the date hereof between between the Fund and Bankers Trust Company (the "Auction
Agency Agreement," and together with the Custodian Agreement, the "Fund
Agreements"); and the Underwriting Agreement. Additionally, we have relied upon
the Order of the Commission pursuant to Section 8(a) of the Securities Act,
declaring the Registration Statement effective as of p.m. on August , 2001, 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 sole shareholder and the Board of
Trustees of the Fund, the documents delivered to the Underwriters by the Fund
and the Investment Manager dated as of the date hereof pursuant to the
Underwriting Agreement and such other documents, including certificates of
officers of the Fund, 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 as of August , 2001, 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 and (2) a Certificate of the Special Deputy
Secretary of State of the State of New York dated June 21, 2001, certifying
copies of (a) a Certificate of Designation by the Fund dated June 11, 2001 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
June 21, 2001 relating to the Fund and (4) a LEXIS search on August , 2001, of
the New York Department of State, Corporate Record, showing the "status" of the
Fund as "active" and noting that "good standing status can only be determined by
performing a search in the records of both the Department of State Corporation
Records and the Department of Tax and Franchise." 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.
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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 Underwriting Agreement, the Auction
Agency Agreement and the Broker-Dealer Agreement provides that it is to be
governed by and construed in accordance with the laws of the State of New York.
In rendering the opinion as to enforceability expressed in paragraph 5 below, we
have limited the scope of our opinion to the conclusions that would be reached
by a Massachusetts court that had determined that each of the Fund Agreements
would be governed by, and construed in accordance with, the internal laws of The
Commonwealth of Massachusetts. Further, we express no opinion as to the state
securities or Blue Sky laws of any jurisdiction, including The Commonwealth of
Massachusetts.
For purposes of our opinion set forth in paragraph 2 below with respect to
the power and authority of the Fund to own, lease and operate its properties and
conduct its business, we have relied upon certificates of officers of the Fund
as to the states in which the Fund leases or owns real property or in which it
conducts material operations.
Insofar as this opinion relates to factual matters, we have made inquiries
to officers of the Fund, the Investment Manager and the Portfolio Manager to the
extent we believe reasonable with respect to such matters and have relied upon
representations made by the Fund and the Investment Manager in the Underwriting
Agreement, representations made by the Portfolio Manager to the Investment
Manager and representations made to us by one or more officers of the Fund, the
Investment Manager or the Portfolio Manager. We have not independently verified
the accuracy of such representations. In respect of our opinions set forth in
paragraphs 7, 9 and 10 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 is 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.
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.
B-3
3. The Fund's authorized capitalization is as set forth in the Registration
Statement and the Prospectus. The Fund has an indefinite number of authorized
common shares of beneficial interest, no par value per share. The Shares
conform in all material respects as to legal matters to the description of them
under the caption entitled "Description of APS" in the Prospectus. All
outstanding common shares of beneficial interest of the Fund have been duly
authorized and are validly issued, fully paid and, subject to the penultimate
paragraph of this opinion letter, non-assessable. The Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and, subject to the penultimate paragraph of this
opinion letter, non-assessable. No person is entitled to any preemptive or
other similar rights with respect to the Shares.
4. To the best of our knowledge after due inquiry, including oral inquiries
of the Commission staff on June 28, 2001, the Fund is duly registered with the
Commission under the Investment Company Act as a closed-end management
investment company, and all required action has been taken by the Fund under the
Securities Act, the Investment Company Act and the rules and regulations
thereunder in connection with the issuance and sale of the Shares to make the
public offering and consummate the sale of the Shares pursuant to the
Underwriting Agreement.
5. The Fund has, 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 Fund Agreement has been duly
and validly authorized, executed and delivered by the Fund. Each Fund Agreement
complies in all material respects with all applicable provisions of the
Investment Company Act and the Investment Advisers Act of 1940, as amended, as
the case may be. Assuming due authorization, execution and delivery by the other
parties thereto, each Fund Agreement constitutes the legal, valid and binding
obligation of the Fund enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, moratorium, reorganization and other laws
of general applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether enforceability is considered in
a proceeding in equity or at law).
6. The Fund has, or at the relevant time had, full power and authority to
enter into each of the Investment Management Agreement and the Underwriting
Agreement and to perform all of the terms and provisions thereof to be carried
out by it. The Investment Management Agreement and the Underwriting Agreement
have been duly and validly authorized, executed and delivered by the Fund.
7. None of (a) the execution and delivery by the Fund of the Investment
Management Agreement, the Underwriting Agreement or any of the Fund Agreements,
(b) the issue and sale by the Fund of the Shares as contemplated by the
Underwriting Agreement and (c) the performance by the Fund of its obligations
under the Investment Management Agreement, the Underwriting Agreement or any of
the Fund Agreements or the consummation by the Fund of the other transactions
contemplated by the Investment Management Agreement, the Underwriting Agreement
or any of the Fund Agreements
B-4
conflicts or will conflict with, or results or will result in a breach of, the
Declaration of Trust or the Amended Bylaws or, to our knowledge, any agreement
or instrument to which the Fund is a party or by which the Fund is bound, or
violates or will violate any federal statute, law or regulation or any judgment,
injunction, order or decree of any federal governmental agency or body that is
applicable to the Fund and that is known to us, which violation would have a
material adverse effect on the condition or business of the Fund.
8. To the best of our knowledge, the Fund is not currently in breach of, or
in default under, any material written agreement or instrument to which it is a
party or by which it or its property is bound or affected.
9. No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or securities association is
required by the Fund for the consummation by the Fund of the transactions
contemplated in the Investment Management Agreement, the Underwriting Agreement
and the Fund Agreements, except such as (a) have been obtained under the
Securities Act, the Investment Company Act or the Exchange Act and (b) may be
required by the New York Stock Exchange or the National Association of
Securities Dealers, Inc. or under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters
pursuant to the Underwriting Agreement.
10. To our knowledge, there are no legal or governmental proceedings
pending or threatened against the Fund, or to which the Fund or any of its
properties is subject, that are required to be described in the Registration
Statement or the Prospectus but are not described therein as required.
11. To the best of our knowledge after due inquiry, there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which have not been so described or
filed as an exhibit or incorporated therein by reference.
12. Each of the sections in the Prospectus entitled "Taxes" and "Tax
matters," to the extent that it states matters of United States law or legal
conclusions with respect thereto, presents a fair summary of the principal
federal income tax rules currently in effect applicable to the Fund and to the
purchase, ownership and disposition of the Shares.
13. 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 to the applicable requirements of the Securities Act and
the Investment Company Act.
B-5
We have not independently verified the accuracy, completeness or fairness
of the statements made or the information contained in the Registration
Statement or the Prospectus and, except in the respects and to the extent set
forth in paragraphs 3 and 13 above, we are not passing upon and do not assume
any responsibility therefor. In the course of the preparation by the Fund of
the Registration Statement and the Prospectus, we have participated in
discussions with your representatives and employees and officers of the Fund,
the Investment Manager and the Portfolio Manager and in discussions with the
Fund's independent accountants, in which the business and the affairs of the
Fund, the Investment Manager and the Portfolio Manager and the contents of the
Registration Statement and the Prospectus were discussed. There is no assurance
that all material facts as to the Fund, the Investment Manager, the Portfolio
Manager and their affairs were disclosed to us or that our familiarity with the
Fund, the Investment Manager or 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 Manager and the Portfolio Manager as to the materiality of
the facts disclosed to us. On the basis of information that we have gained in
the course of our representation of the Fund in 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 August , 2001, the Registration Statement
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that as of the date of the Prospectus and
the date hereof the Prospectus contained an untrue statement of material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light, in each case, of the circumstances under
which they were made, not misleading (in each case, other than the financial
statements and schedules, the notes thereto and any schedules and other
financial data contained or incorporated by reference therein or omitted
therefrom, as to which we express no opinion).
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Fund. However, the Fund's
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Fund and requires that notice of such disclaimer be given in each agreement,
obligation, and instrument entered into or executed by the Fund or the Trustees.
The Declaration of Trust provides for indemnification out of the property of the
Fund for all loss and expense of any shareholder held personally liable solely
by reason of being or having been a shareholder of the Fund. Thus, the risk of
a shareholder's incurring financial loss on account of being a shareholder is
limited to circumstances in which the Fund itself would be unable to meet its
obligations.
This letter and the opinions expressed herein are furnished by us to you
and are solely for benefit of the Underwriters, except that Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois) may rely on this letter as to all matters
governed by the laws of The Commonwealth of Massachusetts in delivering its
opinion to you on the date hereof.
Very truly yours,
Ropes & Xxxx
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SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING PIMCO ADVISORS L.P.
August , 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: PIMCO Advisors L.P.
-------------------
Ladies and Gentlemen:
I am the General Counsel of PIMCO Advisors L.P., a Delaware limited
partnership ("PIMCO Advisors"), and have counseled PIMCO Advisors in such
capacity in connection with the sale to you by PIMCO Municipal Income Fund, a
voluntary association with transferable shares organized and existing under and
by virtue of the laws of The Commonwealth of Massachusetts (commonly referred to
as a Massachusetts business trust) (the "Fund"), of 1,600 Auction Preferred
Shares, Series A, 1,600 Auction Preferred Shares, Series B, 1,600 Auction
Preferred Shares, Series C, 1,600 Auction Preferred Shares, Series D, and 1,600
Auction Preferred Shares, Series E, of the Fund (the "APS"), pursuant to a
registration statement on Form N-2 under the Securities Act of 1933, as amended
(the "Act") and the Investment Company Act of 1940, as amended (the "Investment
Company Act"), filed with the Securities and Exchange Commission (the
"Commission") on July 9, 2001 (Act File No. 333-64796, and Investment Company
Act File No. 811-10377), as amended by Amendment No. 1 filed with the Commission
on August 14, 2001, and Amendment No. 2 filed with the Commission on August
, 2001 (the "Registration Statement"), and an underwriting agreement dated
August , 2001 by and among you, the Fund and PIMCO Advisors (the
"Underwriting Agreement") relating to the issuance and sale by the Fund of the
APS.
This opinion is rendered to you pursuant to Section 6(e) of the
Underwriting Agreement. Capitalized terms used herein without definition have
the meanings assigned to them in the Underwriting Agreement.
As such counsel, I have examined such matters of fact and questions of
law as I have considered appropriate for purposes of rendering the opinions
C-1
expressed below, except where a statement is qualified as to knowledge or
awareness, in which case I have made no or limited inquiry as specified below.
I have examined, among other things, the following:
(a) the Underwriting Agreement;
(b) that certain Investment Management Agreement by and between the
Fund and PIMCO Advisors, dated as of June 20, 2001; and
(c) that certain Portfolio Management Agreement by and among Pacific
Investment Management Company LLC and PIMCO Advisors, as accepted
and agreed to by the Fund, dated as of June 20, 2001.
The documents described in subsection (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 PIMCO Advisors on the Transaction Documents),
the authenticity of all documents submitted to me as originals, and the
conformity to authentic original documents of all documents submitted to me as
copies.
I have been furnished with, and with your consent have relied upon,
certificates of officers of PIMCO Advisors with respect to certain factual
matters. In addition, I have obtained and relied upon such certificates and
assurances from public officials as I have deemed necessary.
I am opining herein as to the effect of the federal laws of the United
States, the internal laws of the State of New York and the internal laws of the
State of Delaware, and I express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other jurisdiction or country
or as to any matters of municipal law or the laws of any other local agencies
within any state or country. My opinions set forth in paragraph 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 General Counsel of PIMCO Advisors.
Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:
1. PIMCO Advisors is a limited partnership and is validly existing
and in good standing under the Delaware Revised Uniform Limited Partnership Act
(6 Del. C (S). 17-101, et seq.) with all necessary partnership power and
authority to enter into
C-2
and deliver the Transaction Documents and perform its obligations thereunder and
to carry on its business as it is now being conducted and as described in the
Registration Statement. Based solely on certificates from public officials,
I confirm that PIMCO Advisors is qualified to do business in the following
States: California, New York, Connecticut, Texas and Washington, 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 the Investment Manager to
perform its obligations under the Investment Management Agreement and the
Portfolio Management Agreement.
2. The execution, delivery and performance of the Transaction
Documents by PIMCO Advisors have been duly authorized by all necessary
partnership action of PIMCO Advisors and no other actions on the part of PIMCO
Advisors or its unitholders or any subsidiary of PIMCO Advisors or its
unitholders is necessary to authorize and consummate the transactions
contemplated thereby, and the Transaction Documents have been duly executed and
delivered by PIMCO Advisors.
3. Each of the Investment Management Agreement and the Portfolio
Management Agreement constitutes a legally valid and binding agreement of PIMCO
Advisors, enforceable against PIMCO Advisors in accordance with its terms.
4. Neither the execution and delivery of the Transaction Documents by
PIMCO Advisors, nor the consummation by PIMCO Advisors of transactions
contemplated thereby, nor compliance by PIMCO Advisors with any of the terms and
provisions thereof will:
(i) violate any provision of the Second Amended and Restated
Agreement of Limited Partnership of PIMCO Advisors L.P., effective May 5,
2000,
(ii) violate any federal, California or New York statute, rule or
regulation applicable to PIMCO Advisors (other than federal and state
securities or blue sky laws, the Investment Company Act of 1940, as
amended, and the Investment Advisers Act of 1940, as amended, as to which I
express no opinion),
(iii) violate any agreement to which PIMCO Advisors is a party or
by which it is bound and which is material to PIMCO Advisors' businesses
taken as a whole (the "Material Agreements"),
(iv) violate any order, writ, injunction or decree, known to me
and applicable to PIMCO Advisors, or
(v) to the best of my knowledge, require any consents,
approvals, authorizations, registrations, declarations or filings by PIMCO
Advisors under any federal statute, rule or regulation applicable to PIMCO
Advisors, except as have been obtained under the Act, the Investment
Company Act or the Investment Advisers Act of 1940.
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No opinion is expressed in this paragraph 4 as to the application of
Section 548 of the federal Bankruptcy Code and comparable provisions of state or
foreign law or of any antifraud laws, antitrust or trade regulation laws. No
opinion is expressed in this paragraph 4 with respect to the operating licenses
necessary for PIMCO Advisors' businesses.
5. PIMCO Advisors is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act or the Investment
Company Act from acting as investment adviser for the Fund as contemplated by
the Investment Management Agreement, the Registration Statement and the
Prospectus.
6. The description of PIMCO Advisors and its business, and the
statements attributable to PIMCO Advisors, set forth in the Registration
Statement and the Prospectus under the headings "Prospectus Summary - Investment
Manager" and "Management of the Fund" do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to my knowledge, threatened
against PIMCO Advisors of a nature required to be disclosed in the Registration
Statement or Prospectus or that might reasonably result in any material adverse
change in the ability of PIMCO Advisors to fulfill its obligations under either
the Investment Management Agreement or the Portfolio Management Agreement.
The opinions expressed in paragraph 3 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting the
rights or remedies of creditors generally;
(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.
C-4
In rendering the opinions expressed in paragraph 4 insofar as they
require interpretation of the Material Agreements (i) I have assumed with your
permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the internal laws
of any other state and (ii) to the extent that any questions of legality or
legal construction have arisen in connection with my review, I have applied the
laws of the State of New York in resolving such questions. I advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.
To the extent that the obligations of PIMCO Advisors may be dependent
upon such matters, I assume for purposes of this opinion that: (i) all parties
to the Transaction Documents other than PIMCO Advisors are duly incorporated or
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization; (ii) all parties to
the Transaction Documents other than PIMCO Advisors have the requisite power and
authority and, in the case of natural persons, legal capacity to execute and
deliver the Transaction Documents and to perform their respective obligations
under the Transaction Documents to which they are a party; and (iii) the
Transaction Documents to which such parties other than PIMCO Advisors are a
party have been duly authorized, executed and delivered by such parties and,
other than PIMCO Advisors, constitute their legally valid and binding
obligations, enforceable against them in accordance with their terms. I express
no opinion as to compliance by any parties to the Transaction Documents with any
state or federal laws or regulations applicable to the subject transactions
because of the nature of their business and I express no opinion as to
compliance by any parties to the Transaction Documents with any foreign laws or
regulations applicable to the transactions contemplated by the Transaction
Documents or which may affect the Transaction Documents' enforceability.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
* * *
Special Counsel for the Investment Adviser shall separately opine that, assuming
the Investment Manager is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund as contemplated by the
Investment Management Agreement, the Registration Statement and the Prospectus,
neither the execution and
C-5
delivery of the Underwriting Agreement, the Investment
Management Agreement or the Portfolio Management Agreement by the Investment
Manager, nor the consummation by the Investment Manager of the transactions
contemplated thereby, nor compliance by the Investment Manager with any of the
terms and provisions thereof will violate the provisions of the Investment
Company Act or the Advisers Act; provided, however, that such opinion may
specifically disclaim any opinion as to (a) the reasonableness of the fees to be
paid to the Investment Manager under the Investment Management Agreement and
(b) the compliance by the Investment Manager with its indemnification and
contribution obligations set forth in the Underwriting Agreement.
C-6
SCHEDULE D
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING PIMCO
August , 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Pacific Investment Management Company LLC
-----------------------------------------
Ladies and Gentlemen:
I am the General Counsel of PIMCO Advisors L.P., a Delaware limited
partnership ("PIMCO Advisors"), managing member of Pacific Investment Management
Company LLC, a Delaware limited liability company ("PIMCO"). In such capacity
I am rendering this opinion on behalf of PIMCO in connection with the sale to
you by PIMCO Municipal Income Fund, a voluntary association with transferable
shares organized and existing under and by virtue of the laws of The
Commonwealth of Massachusetts (commonly referred to as a Massachusetts business
trust) (the "Fund"), of 1,600 Auction Preferred Shares, Series A, 1,600 Auction
Preferred Shares, Series B, 1,600 Auction Preferred Shares, Series C, 1,600
Auction Preferred Shares, Series D, and 1,600 Auction Preferred Shares, Series
E, of the Fund (the "APS"), pursuant to a registration statement on Form N-2
under the Securities Act of 1933, as amended (the "Act") and the Investment
Company Act of 1940, as amended (the "Investment Company Act"), filed with the
Securities and Exchange Commission (the "Commission") on July 9, 2001 (Act File
No. 333-64796, and Investment Company Act File No. 811-10377), as amended by
Amendment No. 1 filed with the Commission on August 14, 2001, and Amendment No.
2 filed with the Commission on August , 2001 (the "Registration Statement"),
and an underwriting agreement dated August , 2001, by and among you, the Fund
and PIMCO Advisors (the "Underwriting Agreement") relating to the issuance and
sale by the Fund of the APS.
This opinion is rendered to you pursuant to Section 6(e) of the
Underwriting Agreement. Capitalized terms used herein without definition have
the meanings assigned to them in the Underwriting Agreement.
As such counsel, I have examined such matters of fact and questions of
law as I have considered appropriate for purposes of rendering the opinions
expressed
D-1
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 PIMCO Advisors L.P., as accepted and agreed to by the Fund,
dated as of June 20, 2001 (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 General Counsel of PIMCO Advisors.
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 (S).
18-101, et seq.) with all 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 solely 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.
D-2
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 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, California or New York statute, rule or
regulation applicable to PIMCO (other than federal and state securities or
blue sky laws, the Investment Company Act of 1940, as amended, and the
Investment Advisers Act of 1940, as amended, as to which I express no
opinion),
(iii) violate any agreement to which PIMCO is a party or by which
it is bound and which is material to PIMCO's businesses taken as a whole
(the "Material Agreements"),
(iv) violate any order, writ, injunction or decree, known to me
and applicable to PIMCO, or
(v) to the best of my knowledge, require any consents, approvals,
authorizations, registrations, declarations or filings by PIMCO under any
federal statute, rule or regulation applicable to PIMCO, except as have
been obtained under the Act, the Investment Company Act or the Investment
Advisers Act of 1940.
No opinion is expressed in this paragraph 4 as to the application of
Section 548 of the federal Bankruptcy Code and comparable provisions of state or
foreign law or of any antifraud laws, antitrust or trade regulation laws. No
opinion is expressed in this paragraph 4 with respect to the operating licenses
necessary for PIMCO's businesses.
5. PIMCO is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment sub-adviser for the Fund as contemplated by the
Portfolio Management Agreement, the Registration Statement and the Prospectus.
6. The description of PIMCO and its business, and the statements
attributable to PIMCO, set forth in the Registration Statement and the
Prospectus under
D-3
the headings "Prospectus Summary - Portfolio Manager" and "Management of the
Fund" do not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to my knowledge, threatened
against PIMCO of a nature required to be disclosed in the Registration Statement
or Prospectus or 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 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
D-4
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.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
D-5
SCHEDULE E
FORM OF ACCOUNTANT'S LETTER
August , 2001
The Board of Trustees of
PIMCO Municipal Income Fund
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of PIMCO Municipal
Income Fund (the "Fund") as of __________, 2001 included in the Registration
Statement on Form N-2 filed by the Fund under the Securities Act of 1933 (the
"Act") (File No. 333- ) and under the Investment Company Act of 1940 (the
"1940 Act") (File No. 811- ); such statement and our report with respect to
such statement are included in the Registration Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the Fund
within the meaning of the Act and the applicable rules and regulations
thereunder.
2. In our opinion, the statement of assets and liabilities included
in the Registration Statement and audited by us complies as to form in all
respects with the applicable accounting requirements of the Act, the 1940
Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Trustees and all Committees of
the Board of Trustees of the Fund as set forth in the minute books at the
offices of the Fund, officials of the Fund having advised us that the
minutes of all such meetings through ________________, 2001, were set
forth therein.
4. Fund officials have advised us that no financial statements as of
any date subsequent to ________________, 2001, are available. We have made
inquiries of certain officials of the Fund who have responsibility for
financial and accounting
E-1
matters regarding whether there was any change at ________________, 2001,
in the capital shares or net assets of the Fund as compared with amounts
shown in the _____________, 2001, statement of assets and liabilities
included in the Registration Statement, except for changes that the
Registration Statement discloses have occurred or may occur. On the basis
of our inquiries and our reading of the minutes as described in Paragraph
3, nothing came to our attention that caused us to believe that there were
any such changes.
The foregoing procedures do not constitute an audit made in accordance with
generally accepted auditing standards. Accordingly, we make no representations
as to the sufficiency of the foregoing procedures for your purposes.
This letter is solely for the information of the addressees and to assist the
underwriters in conducting and documenting their investigation of the affairs of
the Fund in connection with the offering of the securities covered by the
Registration Statement, and is not to be used, circulated, quoted or otherwise
referred to within or without the underwriting group for any other purpose,
including but not limited to the registration, purchase or sale of securities,
nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Very Truly Yours,
PRICEWATERHOUSECOOPERS LLP
E-2
